The Equal Employment Opportunity Commission (EEOC) has been concerned for quite a while about the disparate impact that the criminal background checks many employers run on applicants and employees may have a disparate impact on the basis of race and national origin.  Specifically, the EEOC has been convinced since at least the 1980s that the use of criminal background checks, and employers’ tendency to automatically screen out applicants with arrest histories, has historically had a disproportionate impact on applicants and employees belonging to minority races and those of foreign national origin.

The EEOC codified its position in April 2012 when it issued its “Enforcement Guidance On the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII.”  In that document, the EEOC cautioned employers that the fact that an applicant or employee has been arrested does not establish that criminal conduct has occurred, and an exclusion based on an arrest, by itself, is not job-related and consistent with business necessity.  The EEOC cautioned employers to make employment decisions based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question, rather than relying on the fact of the arrest itself.  The EEOC further cautioned employers who conduct criminal background checks that a violation of Title VII may occur when an employer treats criminal history information differently for an applicant or employee of one race or national origin over another, as it suggests that the employer is relying on discriminatory animus – that is, stereotypes about an individual’s proclivity for criminality based on his or her race or national origin.

The EEOC recently followed through on its new Guidance by filing well-publicized lawsuits in federal court against two major employers (a major discount retail chain and a luxury car manufacturer), claiming that their use of criminal background checks disproportionately screened out African-American job applicants.  The EEOC found fault with the employers’ practice of conditioning all job offers – regardless of the nature of the applicants’ expected job duties – on successfully passing a criminal background check, a practice that the EEOC contends results in a pattern of nationwide race discrimination against African-American job applicants.

Both lawsuits are still in their earliest stages, and whether the EEOC will ultimately be successful is unclear.  But employers should be aware that the EEOC has identified eliminating barriers to hiring as one of its top priorities in its recently-adopted strategic enforcement plan, and, therefore employers would be well-served to revisit any background check policies. Employers implementing background checks should make conditional offers prior to running the background check.  If a candidate does have a criminal background, the employer should determine whether hiring the individual poses a risk, taking into account the nature of the crime of which the employer was convicted, the time that has elapsed since the conviction, and the nature of the job for which he or she is being considered (i.e., does the job involve handling money, having access to customers’ sensitive data, having access to children or vulnerable adults?).  Employers should also ensure that their background check process – including pre-check disclosure and subsequent notifications – comply with the Fair Credit Reporting Act, and are encouraged to consult with their employment counsel to review their policies and associated forms.