! Fair Credit Reporting Act/Approximately One Dozen Mini-Fair Credit Reporting Acts! Stand-Alone Disclosures! Pre-Adverse Action Notices with

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2 ! On April 25, 2012 the EEOC approved, by a 4-1 vote, an Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964! The Guidance was effective immediately! There was no public comment on proposed content! The Guidance is 52 pages (although pages are endnotes) and give examples of proper and improper employer practices! But first!. 2

3 ! Fair Credit Reporting Act/Approximately One Dozen Mini-Fair Credit Reporting Acts! Stand-Alone Disclosures! Pre-Adverse Action Notices with Appropriate Attachments! Adverse Action Notices with Appropriate Attachments! State Caveats on Disclosures! Massachusetts CORI Related Requirements 3

4 ! Class Action Lawyers Are Focused On FCRA Compliance! Ensure That Any Disclosure Does Not Contain A Release of Claims! Ensure Pre-Adverse/Adverse Action Process Being Properly Applied! Some Process Issues Interact With Substantive Disqualification Issues For Example, Automatic Pre- Adverse Action Letters 4

5 ! Primary Focus For Remainder of Presentation Will Be on the EEOC Guidance! But Please Remember Certain Jurisdictions Have For Years Required Employers To Engage in an Individualized Job-Related Analysis Before Disqualifying Based on Criminal Background! These Jurisdictions Include California (adverse impact), New York and Wisconsin! And Of Course Any Analysis Must Differentiate Between Convictions, Arrests and Pending Arrests 5

6 The Guidance replaced! a 1987 EEOC Policy Statement regarding Conviction Records; and! a 1990 Policy Guidance on the Consideration of Arrest Records 6

7 ! Dissenting Commissioner Barker In summary - I object to the utter lack of transparency in the development of this guidance. I object to the inexcusable way the public has been intentionally shut out of this process. I object to the unnecessary haste at which this document has been pushed through, and I object to the burden it places on business owners. 7

8 On the other hand, the Legal Action Center press release states: LAC and HIRE wholeheartedly support the new guidance, including provisions that: Put employers on notice that categorical exclusions for people with certain convictions may violate [federal law] because of the disparate impact on minorities!. Offer examples of common policies and practices that violate Title VII!. ACLU, NELP and others very pleased 8

9 ! Employers should be concerned by the new guidance if they use criminal background checks and: o Use them on a regular basis ( big numbers are bad numbers ) o Solicit and maintain race, gender, age, disability or veteran data on applicants this applies to government contractors and subcontractors in particular o Applicant and/or background check data is maintained by the company or through a vendor o Have a one size fits all criminal background check policy 9

10 ! Requires review of practices but in our opinion does not restrict employers rights to continue to make reasonable employment decisions based on criminal background information! This concept is reinforced for multi-state employers for whom an individualized analysis has long been required under state and local laws such as NYS and NYC 10

11 ! Arrests itself as opposed to underlying conduct should not be considered in making employment decisions no significant change the Guidance respects an employer s right to make credibility determination! Convictions should be subject to individualized analysis and dialogue - as noted above, individualized analysis already required under some state laws - such individualized analysis also was suggested to a lesser extent in the prior guidance 11

12 ! Under Title VII, an employer may justify a practice that results in a disparate impact by demonstrating a business necessity for that practice. An employer can demonstrate business necessity under the 1987 Policy by showing it considered three factors in making its decision: 1. The nature and gravity of the criminal offense(s); 2. The time that has passed since the conviction and/or completion of the sentence; and 3. The nature of the job held or sought. ( Green factors ) In essence, utilization of the factors was a proxy for business necessity and the basis for arguing to EEOC there is no need for a disparate impact analysis. 12

13 ! Narrowly Targeted Screens May Satisfy Business Necessity - The Guidance contemplates that an employer may satisfy its Title VII obligations by using an internal policy if it is narrowly tailored. The Guidance explains narrowly tailored as a demonstrably tight nexus to the position in question. Title VII thus does not necessarily require individualized assessment in all circumstances. The Guidance refers to targeted screens that are based on the Green factors, i.e., the nature of the crime, the time elapsed and the nature of the job. 13

14 ! The guidance does not require pre-validation of disqualification criteria! Of course, SUCH A PER SE STANDARD SHOULD BE THE EXCEPTION, NOT THE RULE and as noted the Guidance suggests that individualized analysis accompany such a targeted screen! The Guidance does not provide an example of a narrowly targeted screen that would pass muster. However, Commissioner Lipnic previously provided the example of an applicant for a day care center who had been convicted of child molesting! Recency also likely would be an issue in determining whether a targeted screen, alone, would suffice 14

15 ! Validation Of Criminal Conduct Exclusion but is there data or analysis about criminal conduct as related to subsequent work performance or behaviors?! The EEOC appears doubtful that data exists to allow an employer to conduct such a validation study 15

16 ! Targeted Screens Accompanied by Individualized Assessment THE BEST PRACTICE - the Guidance clearly prefers that a targeted screen be accompanied by notice to the individual under scrutiny and an individualized assessment of the individual and the crime and the position in question. The Guidance lists nine possible topics of consideration in an individualized assessment, all of which generally require a dialogue: 16

17 ! Criminal record is inaccurate! The facts and circumstances surrounding the offense;! The number of offenses for which the individual was convicted;! Age at time of conviction or release from prison;! Evidence that the individual performed the same type of work, post-conviction, with the same or a different employer, without incidents of criminal conduct;! The length and consistency of employment history before and after the offense; 17

18 ! Rehabilitation;! Employment or character references and other information regarding the individual s fitness for the particular position; and! Whether the individual is bonded. If the individual does not respond to the employer s inquiries, the employer may make its decision without the information. 18

19 ! Federal disqualifier prevails and employers not even required to seek waivers. Examples include: o Child care workers in federal agencies o Bank employees o Port workers! State or local disqualifiers do not but what choice does an employer have? 19

20 ! Suggested implementation of ban the box but likely does not work for every organization. - broad questions maximize ability to argue individual omitted or misrepresented information - different options! Suggestion of claims for those discouraged from applying due to employer s reputation in community 20

21 ! The EEOC will be looking for evidence that an employer conducts criminal background checks in unrelated charges! Avoid erroneously providing criminal background practice and policy information in exhibits to EEOC in unrelated charges! If the charge does not address criminal background issues, avoid unnecessarily disclosing the fact that the charging party took and passed a criminal background check, which might be contained in a personnel file 21

22 ! If There Are Targeted Screens: use different standards for different positions! Avoid policies that indicate automatic exclusions, instead, Acme Corp. believes the following crimes are job related--applicants with these offenses will be subject to individualized assessment! Train HR and decision makers to avoid local decision makers instinct to rely on hard and fast rules such communications jeopardize demonstrating compliance! Self-audit to root out inconsistencies, e.g. on-line kick out 22

23 ! Also there is the potential for class action suits driven by plaintiffs bar! Be careful that individualized assessments do not create disparate treatment issues, i.e., hiring Caucasians who explain away a criminal record and not hiring minorities who provide similar explanations 23

24 ! Not 100% clear but even if courts don t, significant potential issues with EEOC before judiciary becomes involved! Courts sometimes bow to EEOC guidance Justice Scalia generally defers to EEOC! If guidelines rejected, pure Disparate Impact business necessity analysis applies difficult standard to meet and arguably validation is required! Also potential challenges to Guidance based on manner in which EEOC passed it and potential Congress would limit EEOC s funding to enforce Guidance 24

25 ! Periodically conduct a self-audit of the disparate impact of your background check policies! Analyze the data to ensure it is consistently used to disqualify applicants (if not consistently applied, this can be evidence of disparate treatment)! Conduct these analyses under the attorney-client privilege 25

26 ! Review and refine current policies! Limit per se disqualifiers (especially those that apply to all criminal records) and engage in appropriate analysis for any remaining per se disqualifiers! Analyze specific jobs and specific crimes if a general matrix is utilized! Consider recency! Maintain a file explaining the basis for policy refinements! Train personnel with hiring responsibilities 26

27 ! Be careful of automatic pre-adverse action letters! If ratings are used, utilize caveats! Engage in individualized analysis and dialogue whenever possible 27

28 THE MATERIAL CONTAINED IN THIS PRESENTATION WAS PREPARED BY THE LAW FIRM OF JACKSON LEWIS LLP FOR THE ATTENDEES OWN REFERENCE IN CONNECTION WITH THIS SEMINAR. SINCE THE MATERIAL AND RELATED DISCUSSIONS ARE INFORMATIONAL AND EDUCATIONAL IN NATURE AND REPRESENT THE SPEAKER S OWN VIEWS, ATTENDEES SHOULD CONSULT WITH COUNSEL BEFORE TAKING ANY ACTIONS AND SHOULD NOT CONSIDER THESE MATERIALS OR RELATED DISCUSSIONS TO BE LEGAL OR OTHER ADVICE. PROFESSIONAL ADVICE SHOULD BE OBTAINED BEFORE ATTEMPTING TO ADDRESS ANY LEGAL SITUATION OR PROBLEM. 28