5 Reasons Why Criminal Background Checks Are a Perfect Storm for a Lawsuit

Posted by Molly DiBiancaOn January 19, 2012In: Background Checks

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Criminal background checks of job applicants seems to have reached a tipping point as a topic in employment-law circles. So, what are the key components leading to this perfect storm of EEO laws?

1. Most Employers Consider Criminal History
According to a 2010 study conducted by SHRM, more than 9 out of 10 employers polled conducted criminal background checks on some or all job candidates as part of the pre-employment screening process. The study found that 73% of employers conduct these checks for all candidates, while 19% used them only for selected positions.

2. More Adults Have Criminal Records
According to a March 2011 study by the National Employment Law Project, more than 1 in every 4 adults are estimated to have a criminal record. Thus, the use of criminal-background checks in the job-screening process affects more than one-quarter of all potential applicants. See 65 Million "Need Not Apply" (PDF)

3. EEOC's Public Meeting
In July 2011, the EEOC held a public meeting to "Examine Arrest and Conviction Records as Hiring Barrier," focusing on the use of criminal records by employers for employment screening background checks. The purpose of the meeting was to identify the ways in which criminal histories are being used, how they can be used appropriately, the legal guidelines for doing so.

4. Ban-the-Box Movement--Nationally and Locally
Around the country, cities, counties, and municipalities are adopting laws and ordinances known as "ban-the-box" laws. The reference is to remove from job applications the box that an applicant is asked to check to indicate that he or she has a criminal history. By removing the "box" question, the idea is that an applicant will not be automatically excluded from consideration as a result of criminal background.

Philadelphia is one of the latest cities to join this movement. The Fair Criminal Record Screening Standards Act, which was signed in April 2011, took effect on Friday, January 13, 2012. As detailed in this earlier post, the Act prohibits employers from inquiring during the fir initial interview about a candidate's arrest history.

5. EEOC Settles Lawsuit for $3M
The most recent development has been the settlement of a lawsuit brought by the EEOC against Pepsi Beverages Company ("Pepsi"), in which Pepsi agreed to pay $3.13 million as a result of its policy, which was revised during the EEOC's investigation, and which prohibited the employment of applicants with an arrest history, regardless of whether the arrest had led to a conviction. The payment will be split among more than 300 applicants who, according to the terms of the conciliation agreement, were adversely affected by the policy between 2006 and 2010. A portion of the sum will be allocated for the administration of the claims process. The suit alleged that the employer's criminal background-check policy violated Title VII's prohibition against race-based discrimination.

How can an employer avoid the perfect storm? There are two keys. First, and most important, do not use criminal histories as a per se bar to employment. Second, use the EEOC's suggested best practices to determine whether a particular candidate's criminal history should be considered and, if so, how to do so in a legally sound way. For more information on this process, see these earlier posts:
How Considering a Candidate's Arrest History Could Land You In EEOC Jail
Research Puts 5-Year Expiration Date on Criminal Records Used for Background Checks
Is Creditworthiness a Protected Characteristic? Yes, says EEOC


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