EEOC Sues Two Companies for Use of Criminal Background Checks

Employee Relations, Employment Law

Revealing the potential pitfall employers face when using criminal background checks during the hiring process, the Equal Employment Opportunity Commission this week filed its first two cases under the new enforcement guidance it published last year, alleging an adverse impact on racial minorities.  In its suit against BMW, the EEOC alleges the company’s policy is not job-related and consistent with business necessity because it is "a blanket exclusion without any individualized assessment of the nature and gravity of the crimes, the ages of the convictions, or the nature of the claimants' respective positions."  In the suit against Dollar General, the Commission targets the company’s practice of automatically disqualifying any applicants who have had certain types of convictions within the last ten years.  The company is also alleged to have failed to reverse a hiring decision that was based on an incorrect conviction report.  In April 2012, the EEOC approved enforcement guidance restricting employers’ use of criminal background checks (even where required by state and local law) despite Congressional concerns.  Although the new guidance does not disallow the use of criminal background checks, it makes it more difficult for employers to establish that decisions made as a result of the checks are “job related and consistent with business necessity.”  It also requires that in most cases where an applicant is rejected, employers must conduct an “individualized assessment,” including a meeting with the applicant, even though it is not required by Title VII.  It remains to be seen how these two cases will be treated in the courts if they are not settled beforehand, but it demonstrates the Commission's ongoing campaign to sharply restrict the use of background checks in employment decisions.