In an opening salvo following its recently revised enforcement guidelines, the Equal Employment Opportunity Commission (“EEOC”) has filed suit against two major employers, a national retail chain and an international automobile manufacturer, alleging the companies used criminal background checks to disproportionately exclude African-Americans from their workforces.
On June 11, 2013, the EEOC filed suit against Dollar General, claiming the discount retailer systematically discriminated against African-American job applicants by using a process that screened out applicants that had previously been convicted of criminal offenses.
On the same day, the EEOC filed suit against BMW Manufacturing Co., LLC, alleging that the company’s Spartanburg, South Carolina facility had similar policies that resulted in the termination of African-American employees. Click here to view the suit.
Back in April 2012, Phelps Dunbar first reported the EEOC’s revision of its enforcement guidelines as to what extent employers may rely on an individual’s criminal history in making hiring or other employment selection decisions without violating Title VII of the Civil Rights Act of 1964 (“Title VII”). Phelps Dunbar eLABORate on Title VII. The suits against Dollar General and BMW should come as no surprise. In January 2013, the EEOC released its Strategic Enforcement Plan for 2013-2016, in which it announced its intent to refocus its litigation priorities on “systemic discrimination” by employers, as opposed to discrimination claims brought by individual employees. In its Strategic Enforcement Plan, the EEOC included the improper use of criminal background checks as an example of the systemic discrimination it intended to target.
The stated rationale for the EEOC’s position is that employers’ reliance on criminal records as a factor in hiring decisions disproportionately affects African-Americans and Hispanics, who statistically have higher rates of arrest and criminal conviction. The EEOC also makes clear that use of criminal histories could support a claim of disparate treatment discrimination, including when decisions are made based on stereotypes about classes of individuals.
For an employer to avoid Title VII disparate impact liability for excluding an individual with a criminal record, the EEOC requires that employers show that any reliance on a criminal history is job related and consistent with business necessity. In doing so, an employer must show that it considered three factors: (1) the nature and gravity of the offense, (2) the amount of time since the conviction, and (3) the relevance of the offense to the type of job being sought. The EEOC’s guidelines place the burden on employers to develop screening guidelines to individually assess each applicant/employee to determine whether a criminal history may be used as a factor in any employment decision.
While the new guidelines do not forbid criminal background checks by employers, blanket employment exclusions are proscribed and “[a] policy or practice that excludes everyone with a criminal record from employment will not be job related and consistent with business necessity and therefore will violate Title VII, unless it is required by federal law.” The guidelines also sharply differentiate between an employer’s reliance on a record of arrests as opposed to a record of convictions. The EEOC’s guidance states that reliance on an arrest as a basis for exclusion (as opposed to actual conduct underlying the arrest) will not satisfy Title VII’s requirement that the policy be job related and consistent with business necessity.
Dollar General has denied the allegations in the EEOC’s lawsuit, stating that the company’s screening policies are lawful and non-discriminatory and are intended to ensure the safety of its customers and employees and to protect the company’s assets. BMW likewise denied the allegations, highlighted the company’s culture of non-discrimination and its highly diverse workforce, and promised a vigorous defense against the claims in the suit.
The EEOC’s targeting of Dollar General and BMW should serve as a wake-up call to employers to review their existing policies. The following steps would place an employer’s criminal background policy in accord with the EEOC’s guidelines.