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Background check guidance attracting renewed scrutiny

neih0825_pg1_background_checksTwo years after a guidance warning employers against the overly broad use of criminal background checks to screen potential new hires was issued by the U.S. Equal Employment Opportunity Commission, it is drawing renewed criticism from employers, business groups and lawmakers who say it is cumbersome at best and dangerous at worst.

“EEOC has made it more difficult for employers to ensure the safety of their customers and clients,” said Rep. Timothy L. Walberg, R-Mich., at a recent hearing on the agency’s background guidance.

But supporters of the policy say it strikes the proper balance between employers’ desire to keep their workplaces and customers safe and the EEOC’s task of preventing employment practices that have the intent or effect of discriminating on the basis of race or other impermissible factors.

The guidance “neither discourages or suggests that background checks of this sort should not be used,” said Sherrilyn Ifill, president and director-counsel of the NAACP Legal Defense and  Educational Fund in New York. “Instead it provides exactly what the word says — guidance, to assist, support and help employers figure out how to properly use that information.”

Employment attorneys say that the guidance is not only confusing, but also puts employers in a difficult position.

“Employers are saying, ‘Look, we are under quite a bit of restrictions with respect to what we can learn in the hiring process, yet we are held to task if we hire someone who has a poor background and ends up causing some problem or committing a crime against some third party that we may be held responsible for,’” said C. Michael DeCamps, an attorney at Sands Anderson in Richmond, Virginia.

Complex document

The agency’s guidance on the use of criminal background checks, issued in April 2012, was designed to address the fact that certain minority groups experience disproportionately higher incarceration rates.

The use of criminal background checks to screen applicants, therefore, could either purposefully or unintentionally work to disqualify otherwise suitable job applicants. That means some criminal background check policies could lead to either “disparate treatment” or “disparate impact” liability under Title VII.

The guidance issued by the EEOC requires employers to demonstrate a business necessity for using criminal background checks, and to show that the decision as to whether to use such background checks is made on an individualized basis and not as part of a blanket policy.

The business necessity analysis must take into account several factors, according to the guidance, including the nature of the crime, how long ago it was committed, and whether it has a connection to the kinds of duties the job in question requires.

Applicants must also be given an opportunity to show that they should not be excluded on the basis of their criminal background.

But some employers say the guidance document, which is more than 50 pages long and has 167 footnotes, is far from easy to understand. And the penalty for running afoul of the rules could be a hefty and expensive employment discrimination lawsuit.

“I think clarity is an issue,” said Christopher L. Nickels, an associate at Quarles & Brady in Milwaukee. “When you are the EEOC and you are setting guidance that says [employers] need to be more thoughtful in how [they] use background check information, that necessarily gives this element of subjectiveness to the employer’s decisions. Two people may not think the same thing. Given that subjective, case-by-case inquiry, it makes the necessity of really clear guidance even stronger.”

He said helping clients navigate in this area can be tricky.

“I’ve been advising my clients to avoid blanket exclusions” based on criminal history, Nickels said. “Clients have been taking it a lot more seriously.”

Congress, states and cities take on issue

At a hearing conducted by the House Education & the Workforce Subcommittee on Workforce Protections — one of several hearings focused on the recent actions of the EEOC — lawmakers and business group representatives said the agency’s stance on background checks tied employers’ hands and even puts consumers at risk.

“All Americans expect employers to hire a safe and responsible workforce, especially when workers are employed in areas that require the public’s trust, such as when they enter private homes, transport children to school, or care for aging relatives,” said Walberg, who chairs the subcommittee.

Camille A. Olson, a partner in the San Francisco office of Seyfarth Shaw, testified at the hearing on behalf of the U.S. Chamber of Commerce that the EEOC’s efforts to investigate and prosecute claims of disparate impact discrimination have been overzealous at times. In several recent cases, she said, the agency has been ordered by courts to pay employers nearly $6 million in attorneys’ fees as a result of findings of improper investigatory, litigation and conciliation efforts.

Those cases indicate “that the theories that are being brought are not well grounded either in the facts or in the law. There is no question about it,” Olson said at the hearing. “Remember, it is very rare in the law for a court to actually sanction a litigant that loses a case. So the fact that you see millions of dollars here [shows] the EEOC is failing.”

The EEOC is not the only entity taking on the issue of criminal background checks. Ifill noted that “ban the box” rules prohibiting employers from asking job applicants about their criminal histories on initial employment applications have been enacted in 12 states, including Massachusetts and Rhode Island, and in 60 municipalities.

Those laws do not prohibit employers from inquiring about criminal histories, but they require them to wait until later in the hiring process to make any such inquiry.

“Neither criminal background checks, nor guidance and standards regarding how to properly use criminal background checks, are entirely new,” Ifill said. “The guidance that was developed and promulgated by the EEOC actually is based on law that comes out of federal courts dating back to 1975.”

The laws are not meant to hurt businesses, despite what critics suggest, she added. They are meant to help them make hiring decisions that do not have the effect of casting aside otherwise qualified workers.

“We all know this country is hurting, that potential workers are hurting,” Ifill said “The effort here is to ensure that those who deserve a fair chance at a job have an opportunity to get that job without being excluded based on records that are irrelevant to the job, charges that are too old, or that do not demonstrate that the employee poses a danger.”

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