What the Arrest/Conviction Guidance Means to You

On April 25, the U.S. Equal Employment Opportunity Commission issued an updated Enforcement Guidance on employer use of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964, as amended. The Guidance summarizes the EEOC’s long-held position that employers’ reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin. Although not legally binding, the Guidance provides key insight into how the EEOC views the use of criminal records when screening applicants.

The Guidance is part of the EEOC’s broader effort to crack down on the alleged misuse of arrest and conviction records. The EEOC’s increased efforts in this area are due, in part, to the growing disparity in arrest and incarceration rates for Hispanics and African Americans compared to Caucasians. The Guidance notes that African Americans and Hispanics are arrested at a rate that is two to three times their proportion of the general population. Incarceration rates for male Hispanics (17.2%) and African Americans (32.2%) are also much higher than for Caucasian men (5.9%). The EEOC relies on these disparities in concluding national data “supports a finding that criminal record exclusions have a disparate impact based on race and national origin.”

The Guidance differentiates arrests from convictions, noting that because arrests are not proof of criminal conduct they cannot serve as a proper basis for excluding an individual from employment. The EEOC acknowledges, however, that while an arrest record standing alone may not be used to deny an employment opportunity, an employer may make an employment decision based on the conduct underlying the arrest if the conduct makes the individual unfit for the particular job position.

The bulk of the Guidance focuses on how reliance on conviction records potentially can give rise to disparate-treatment and disparate-impact claims. A disparate-treatment claim arises when an employer treats criminal history differently for different employees based on their race or national origin. A disparate-impact claim arises when an employer’s neutral background-check policy disproportionately impacts a protected class.

If an employer’s background-check policy results in disparate impact, the employer bears the burden of proving its policy is job-related and consistent with business necessity. The Guidance stresses that to establish the “job-related and consistent with business necessity defense,” an employer must use a targeted screen process that considers: (1) the nature and gravity of the offense; (2) the time that has passed since the offense; and (3) the nature of the job held or sought.

The EEOC explains that for individuals screened out by this process, the employer’s policy should provide an opportunity for an individualized assessment, wherein the employee or applicant is given an opportunity to demonstrate that the exclusion should not be applied due to his particular circumstances. The Guidance provides several factors for consideration during the individualized assessment, such as the number of offenses, age at time of conviction, length, and consistency of employment history before and after the offense, rehabilitation efforts, and character references.

Perhaps most significant are the Guidance’s “employer best practices,” which include the EEOC’s recommendation that employers not ask about convictions on job applications. Instead, the EEOC recommends that if and when employers make such inquiries, the inquiries be limited to convictions for which exclusion would be job-related for the position in question and consistent with business necessity.

In light of the new Guidance, this is an opportune time for employers to reexamine their background-check policies and practices. Although courts are required to defer to EEOC guidance like this to some extent, only time and, unfortunately, lawsuits are likely to determine whether courts determine the EEOC’s new Guidance is correct.