Criminal Background Checks

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September 21, 2018
Author: Jaklyn Wrigley

According to some studies, more than 90 percent of employers conduct criminal background checks for some job applicants, and more than 70 percent conduct background checks on all potential new hires. Many employers conduct some form of criminal background check because they want information about criminal behavior and other related data prior to bringing a candidate into their organization. The rationale for seeking this information ranges from identifying candidates who are honest when filling out their applications, to finding those who display a history of good decision-making and judgment, to reducing the risk of criminal behavior in the workplace and related civil liability by excluding those applicants who may be most likely to (re)engage in criminal activity, potentially posing a risk of harm to the organization and/or its employees.

Despite these important business concerns, the current regulatory climate has changed, moving toward limited inquiry into only certain aspects of a candidate’s background, and then only when the information sought is relevant to the contemplated position. For example, the Equal Employment Opportunity Commission (“EEOC”) and some states take the position that, given the disproportionate rate of minorities that are arrested and convicted of crimes, an employer’s policy of disqualifying all applicants with criminal history can have a discriminatory impact on minority candidates and thereby violate Title VII’s discrimination laws. As a result, employers must rethink the wisdom of broad onesize- fits-all background check policies, and instead, decide whether or not, on a jobposition- by-job-position basis, background information is relevant, helpful, and nondiscriminatory when used to assess a candidate’s suitability for employment.

In order for an employer to protect itself, it must institute appropriate policies concerning the decision to conduct a background check and the manner in which the background check is conducted, policies on what to do with the results of the background check, and appropriate documentation for employment decisions based on the background check. Adopting the correct background check procedures is a critical risk management practice for employers to take to avoid EEOC claims, claims of individual litigants and even the prospect of class action-based lawsuits.

Are background checks right for you?
There are three questions an employer should consider when formulating background check procedures to ensure hiring and screening practices are appropriately tailored, based on sound reasoning, and able to survive claims of discrimination from the EEOC, individual litigants and potential class action claims.

They are as follows:
- Is all available information equally relevant in assessing a particular candidate?
- Do you have a reason to order background checks that is appropriate in light of new regulatory challenges?
- Are you making appropriately tailored assessments of unsuitability based on the background information received?

Once an employer knows the answer to these three questions, it is better equipped to make the best decisions for its business.

What information is relevant for a particular candidate?
The scope of a background screen can be as narrow as reviewing driving history or as broad as reviewing all information contained in any public and educational record. In deciding what to check, it is important to remember the EEOC’s announced suspicions about over-emphasizing the value of criminal history information during hiring as well as consider any other information your company may be using that regulators consider to be discriminatory and only marginally relevant to a particular hiring decision.

For each job description, employers should craft a memo that describes the relevance of, and need for, background information as being job-related to a particular job description. As an employer makes an assessment of positions for which screening should be pursued, they should consider whether or not the particular position being filled is one where: (1) the nature of duties; (2) the environment where the work is performed; or (3) the exposure to certain types of customers or clients, makes it important to know and be able to evaluate a candidate’s criminal history or current financial position as part of the suitability assessment. One way to do this is to identify crimes, re-offense rates, or credit data that demonstrate a concern related to the above, and look to (and keep records of) outside research to see if your assessment can be confirmed. Remember, it is inconsistency in the selection of what type of background check each applicant gets that can often get employers sued for discrimination. Establishing a policy and procedure to make sure each applicant for a job description gets the same background check and having a defensible job-related justification for the relevancy and need for the information for each job position is critical to defending against future discrimination claims. This should be the employer’s practice regardless of the type of background information the employer opts to use.

Types of Background Checks: Criminal History
Even where an employer complies with state law on criminal background checks, it still needs a comprehensive, consistent set of procedures regarding the use of criminal history to avoid claims of discrimination. The key to avoiding such claims is to (1) identify the kind of criminal background information (including how many years back) the company will look, and (2) ensure that the same level of background check is done for every applicant for that position.

Types of Background Checks: Credit History
As with criminal background checks, concerns about the need for credit checks during the hiring process have also been raised by the EEOC in relation to the relevance of credit history information and its potential to inject an element of discrimination into the process. While the EEOC has yet to publish comprehensive guidance on the use of credit checks, it has cautioned that an inquiry into an applicant’s credit tends to more adversely impact minorities and women.

Thankfully, the EEOC does recognize that credit history is properly considered where such information is essential to the particular job in question. For example, certain positions at financial institutions or positions that provide access to financial assets or confidential information are jobs for which a credit check may be supported by business necessity. But, the EEOC sets the bar high for employers who wish to consider credit history during the hiring process. If an employer decides to begin or continue using credit history information during hiring, it should adhere to the following recommendations:
1. Be consistent by setting up the specific kind of financial background check that will be used on a job-description-by-jobdescription basis, and ensure that the background check is consistently used for each applicant for the position;
2. Create memos for each job description that identify the kind of background check used and the why the company needs a particular kind of credit;
3. Offer applicants the chance to explain the negative information, consider granting waivers based on the information provided; and
4. Add language to the company’s Fair Credit Reporting Act notice that informs applicants that they should contact the company if circumstances exist that may explain any negative information contained in the credit report.

These steps will reduce the risk of a challenge and go a long way to ensure that an employer uses credit history information only where necessary.

Types of Background Checks: Arrest History
Both state and federal regulators have warned employers to either ignore this information altogether or to use it merely as a basis to ask an applicant for more detail about the events surrounding the arrest, because the fact that an arrest occurred is not necessarily evidence of criminal conduct. Employers should carefully consider the value of arrest records as part of the hiring assessment and weigh the use of such information against the risk of misuse of this information. Generally, it is recommended to avoid a background check of this type.

What steps can an employer can take to avoid liability?
When the employer receives negative information, the employer is put in the position of having to make a “negative adjudication” (or no hire decision) based on the information obtained. Consistency in the negative adjudication process is a critical litmus test of whether there is discrimination in the workplace. The greater the consistency, the less likely discrimination is present. Conversely, while consistency remains important in the hiring decision process, the EEOC’s new guidelines caution against rigidity and broad-based rules for screening candidates. For example, a hiring decision matrix that screens out a front desk clerk candidate because of a DUI could be challenged for a lack of connection between the screening criteria and appropriate suitability factors for this particular job position. To minimize or avoid liability, Employers should:
1. Develop a comprehensive matrix of consistent negative adjudication standards for each position, which places a greater emphasis on criminal (or credit) history that makes a candidate unsuitable for a particular position. Factors to consider include: (a) the nature of the job sought; (b) the number, nature and gravity of offense(s); (c) the passage of time since the offense and/or completion of the sentence, and any evidence of rehabilitation efforts; and (d) other evidence of suitability;
2. Suspend any blanket hiring policy that has rigid disqualification requirements related to criminal or credit history;
3. Build a screening and hiring policy using job-relatedness and suitability assessments, and develop a written policy to help guide those who have involvement in hiring. Build in best practices addressing how to ask for information about these issues, how to assess them, and how to properly differentiate unique and individualized factors;
4. Train, train, train. A policy is great, but compliance requires understanding the reason for the change, clarity about what is now different, and buy-in for new practices. Training is the best tool to move an organization forward and reduce the risk of misunderstanding or intentional non-compliance with the new policy.
5. Implement the policy consistently. When determining whether to grant a waiver to a particular applicant based on information that explains the circumstances, maintain a record of the decision.

When a subsequent applicant provides similar information, refer to any prior waiver request(s) to ensure similar treatment of all applicants.

The EEOC’s focus on potential discriminatory impact of neutral preemployment policies and practices requires employers to think about these issues in a new way and to assess policies and practices that may be longstanding or withstood prior challenge. Employers in many industries have found themselves the target of some of the EEOC’s systemic investigations of criminal background check policies. The good news is, there are steps an employer can take to minimize or avoid liability.

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