What Do You Do When an Employee Fails a Background Check?

Dear Background Noise:

A very good starting point for analyzing this issue is the “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act,” which was released by the Equal Employment Opportunity Commission in April 2012. As an aside, it is noteworthy that an arrest record alone may not be used to make an adverse employment decision. However, the conduct precipitating an arrest is relevant for employment purposes. In contrast, a conviction is adequate evidence that the individual engaged in the criminal conduct.

The EEOC’s presumption is that the use of criminal conviction and arrest records has a disparate impact on the basis of protected subgroup status (race or gender) and a complainant is likely to establish evidence that such practices exhibit disparate impact. Based on this, the guidance indicates that an employer should consider a number of factors before using this information to make an adverse decision regarding employment.

One factor to be considered is the nature and gravity of the offense or conduct. According to the EEOC: “The nature of the offense or conduct may be assessed with reference to the harm caused by the crime (e.g., theft causes property loss). The legal elements of a crime also may be instructive. For example, a conviction for felony theft may involve deception, threat or intimidation. With respect to the gravity of the crime, offenses identified as misdemeanors may be less severe than those identified as felonies.”

A second factor is the time that has passed since the criminal offense. Obviously, more recent convictions and behavior are typically more relevant. As an aside, with current employees the negative information at issue should be fairly recent unless it wasn’t picked up when initially screening the individual for employment.

And finally, it is imperative to ascertain the nature of a job’s duties and the circumstances under which the job is performed. Employers need to show an adequate linkage between essential functions of the position and the criminal offense — providing evidence that the practice is job- related and consistent with business necessity.

It is important to note that in most cases it is advisable for an employer to conduct an “individualized assessment” to consider more complete information with respect to the criminal conviction. According to the EEOC’s guidance, this “… generally means that an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job-related and consistent with business necessity.”

While far from exhaustive, I trust the above is responsive to the inquiry. The full guidance can be found on the EEOC’s website. Finally, it is interesting to note that the EEOC has recently been unsuccessful in meeting the initial burden of showing that two employers’ background checks (criminal and credit) exhibited disparate impact. In EEOC v. Kaplan Higher Education Corp. (April 2014), the Sixth Circuit Court of Appeals affirmed a decision by the U.S. District Court for the Northern District of Ohio. Also see EEOC v. Freeman, an August 2013 decision by the U.S. District Court for the District of Maryland.

SOURCE: David W. Arnold, Wonderlic, Vernon Hills, Illinois