EEOC Increases Lawsuits Against Companies for Use of Criminal-Background Screens

September 26, 2013 | from AdminBerenson No Comments

In June, the EEOC filed suit against both BWM and Dollar General Corp, alleging both companies used criminal background screens in a manner that discriminated against black applicants. The litigation increases the government’s push to regulate private employers’ use of background checks.

The EEOC guidelines released last year “urge” employers to consider the crime, the job position, and the time that has elapsed since the conviction. The EEOC further “urged” employers to review cases individually and allow applicants to “explain” why they should be hired despite a conviction.

The EEOC’s general counsel said the Dollar General and BMW cases are “very serious systemic race discrimination cases.” At both companies, the EEOC cited statistical disparities in the hiring rates of blacks and nonblacks after the companies ran criminal-background checks.

An attorney for the NAACP Legal Defense Fund praised the lawsuits as an important step against workplace discrimination.

Not everyone agrees.

The EEOC has had a mixed bag of results over the past few years on this issue. In 2011 the EEOC was ordered to pay $750,000 in legal fees to Memphis-based staffing company PeopleMark Inc.

More recently, a federal judge severely reprimanded the EEOC for its efforts against Freemen Co., a Dallas event-marketing company. U.S. District Judge Roger W. Titus stated “The story of the present action has been that of a theory in search of facts to support it.” “But there are simply no facts here to support” the EEOC’s claim that black applicants were improperly discriminated against, the judge said.

While hiring workers with prior convictions can be a prudent practice for a number of reasons, it needs to be done in conjunction with a “second chance policy” drafted by legal counsel in order to create more gain than pain if something goes wrong down the road.

Clients are advised to continue running background checks on key workers (installers, sales representatives and anyone in an accounting-related role), but make sure that applicants are not screened out for arrests – only for convictions – and only if the conviction could relate to job performance concerns. And, as always, don’t run any background checks unless you are sure your materials are in compliance with state and federal laws.