Employment Decisions Archives

Minnesota becomes the latest state to restrict employment criminal checks

On May 13, 2012, Minnesota became the latest state to restrict criminal background checks for employment purposes with its Criminal Background Check Act (S.F. No. 523). Under the new law, which will go into effect on January 1, 2014, public and private employers may not inquire about, consider or require disclosure of an applicant’s criminal history until after the applicant has been granted an interview or before a conditional offer of employment is made. Since 2009, Minnesota law prohibited only public employers from asking about criminal records on job applications.

According to a report from the National Employment Law Project (the “NELP”) dated in April 2013, six states and 50 localities have adopted “Ban the Box” legislation. And pending before Congress is the federal HR 6220 or “Ban the Box Act” introduced last July by Representative Hansen Clarke (D-MI-13) which similar to these state and local laws, would make it illegal for an employer to ask about criminal history in an interview or on an employment application.

|Employment Decisions, Legislation|

Colorado joins list of states that restrict credit report use for employment

Although the FCRA allows employers to consider credit reports for employment purposes, state laws that are more protective of employee rights trump the federal law. Eight states (California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington) and at least one locality, the City of Chicago, limit the employers’ consideration of credit history in personnel decisions. And Colorado was just added to this list with its S.B. 18 that was signed into law on April 19, 2013. Aggressive legislative efforts are likely to continue. The most restrictive bill yet is pending before the New York City Council. It would prohibit employers from using credit reports in hiring except in few instances where such checks are required by law.

|Employment Decisions, Legislation|

Proposed New Jersey bills restrict use of criminal records in employment decisions

In February 2013, identical bills aimed at reducing employment discrimination against individuals with criminal histories were introduced in the New Jersey Senate (S2586) and the New Jersey Assembly (A3837). Both bills propose the adoption of the Opportunity to Compete Act (the “Act”) which would impose multiple restrictions and requirements on employers in connection with seeking and using criminal background information about job applicants. If the Act is adopted, New Jersey will join a growing list of states, cities, and localities which have passed similar anti-discrimination legislation.

|Employment Decisions, Legislation|

Revamped Form 1-9 makes its debut

On March 8, 2013, the U.S. Citizenship and Immigration Services (the “USCIS”) announced that its newly revised Form I-9 is to be used immediately. Notably, as indicated in the Federal Register, the USCIS granted companies until May 7, 2013 to implement the new form, which purportedly has been designed to minimize completion errors. This 60-day grace period allows employers time to adjust their human resource processes, and modify their software. The USCIS has also updated its “Handbook for Employers – Guidance for Completing the Form I-9” (3.8.13 version) to correspond to the new form, and is holding webinars to educate companies in the form’s usage.

The USCIS noted that employers do not need to complete the new form for employees for whom they already have a proper Form I–9 on file, unless re-verification applies. Unnecessary verification may violate the anti-discrimination provision of section 274B of the INA, 8 U.S.C. 1324b, which is enforced by the DOJ’s Office of Special Counsel for Immigration Related Unfair Employment Practices.

|Educational Series, Employment Decisions|

No shortcuts to assuring maximum possible accuracy under the FCRA

When Congress formulated the Fair Credit Reporting Act (“FCRA”) more than 30 years ago, it noted that the law was enacted in order to protect consumers against “the trend toward…the establishment of all sorts of computerized data banks

[that placed a consumer] in great danger of having his life and character reduced to impersonal ‘blips’ and key punch holes in a stolid and unthinking machine which can literally ruin his reputation without cause [116 Cong. Rec. 36570].” This intent has been clearly supported by the amendments that followed allowing greater and more effective protection. But despite the leaps and bounds in legislation, much controversy still exists about the level of protection that this law provides to consumers. And confusion abounds about the compliance requirements for consumer reporting agencies (“CRAs”) on whom the FCRA places “grave” compliance obligations. “There is a need to insure that consumer reporting agencies exercise their ‘grave’ responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy [15 U.S.C. § 1681(a)(4) (2006)].”

The FCRA mandates that “[w]henever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates [15 U.S.C. § 1681e(b)].” So what does this mean? Courts have taken two positions in interpreting the language of this section. The “consumer-friendly” version holds CRAs liable for reports that are technically accurate, but may be misleading or incomplete. (Koropoulos v. Credit Bureau, Inc., 734 F.2d 37, 40; D.C. Cir. 1984: “Congress did not limit the Act’s mandate to reasonable procedures to assure only technical accuracy; to the contrary, the Act requires reasonable procedures to assure maximum accuracy.”) The “business friendly” interpretation requires only technical accuracy in the CRA’s reporting. [Todd v. Associated Credit Bureau Servs., Inc., 451 F. Supp. 447, 449 (E.D. Pa. 1977)].

While this case law is helpful in understanding the CRA’s liability under the statute, there is no doubt that a comprehensive guidance on the methodology to assure maximum accuracy is still much needed especially in view of the proliferation of the so-called “national databases” in the recent years. But despite the lack of clear guidance, a reputable CRA knows that “to assure” means “to earnestly inform or tell positively; state with confidence.” And reporting a record that was identified by name only or relying solely on private database record information in an employment background check does not pass the reasonable procedures test by any standard.

In an Internet marketplace that touts instant results, a CRA’s practice of sending searchers to the courthouse, pulling dozens of cases, and reviewing legal documents to ascertain correct subject identification and record information may be counterintuitive for many employers. And it takes time and money to assure the most accurate and up-to-date results. On the other hand, in a world of over a million people, is a quick and cheap database background search of any real value?

|Employment Decisions|

California limits social media use by employers and educational institutions

Effective January 1, 2013, California will join Maryland and Illinois in significantly restricting employers’ access to their employees’ and job applicants’ social media accounts. Signed into law by Governor Jerry Brown on September 27, 2012 and fittingly announced via Twitter, AB 1844 provides that an employer cannot require or request an employee or applicant to do any of the following:

disclose a username or password for the purpose of accessing personal social media;
access personal social media in the presence of the employer;
divulge any personal social media, except as provided in subdivision.

The law also prohibits an employer from discharging, disciplining, or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates these provisions. However, an employer is not prohibited from terminating or taking an adverse action against an employee or applicant if otherwise permitted by law.

The law does preserve an employer’s rights and obligations to request that an employee divulge personal social media information reasonably believed to be relevant to an investigation of allegation(s) of employee misconduct or violation of applicable laws and regulations, provided that the information is used solely for purposes of that investigation or a related proceeding. An employer is also not precluded from requiring or requesting that an employee disclose a username or password for the purpose of accessing an employer-issued electronic device.

A companion law, AB 1349 that establishes similar requirements for postsecondary education institutions in regard to their students also goes into effect on January 1, 2013.

|Educational Series, Employment Decisions, Social Media|

State laws restricting the use of criminal records gain momentum

By now, most employers are familiar with the EEOC’s April 2012 updated enforcement guidance on the use of arrest and conviction records for employment decisions under Title VII of the Civil Rights Act of 1964. And related state and local laws are quickly gaining momentum. More than 30 cities and at least 26 states now limit the type of criminal background information that employers can obtain or when they can request it.

Effective July 1, 2012, Indiana will join the roster of the restricting states. Its SB 1033 will, in part, ban certain pre-employment inquiries, limit the types of criminal record information that employers and consumer reporting agencies (CRAs) can obtain from Indiana courts, and restrict criminal history information that CRAs can provide in background reports.

This law also provides that Indiana residents with restricted or sealed criminal records may legally state on an “application for employment or any other document” that they have not been adjudicated, arrested or convicted of the offense specified in these records. Covered employers (the term “employer” is not defined) will be prohibited from asking an “employee, contract employee, or applicant” about such records.

Limiting the scope that can be included in a background report, the law further prohibits courts from disclosing information pertaining to alleged infractions where the individual:

is not prosecuted or if the action is dismissed;
is adjudged not to have committed the infraction;
is adjudged to have committed the infraction and the adjudication is vacated; or
was convicted of the infraction and satisfied any judgment attendant to the infraction conviction more than five years ago.

Criminal history providers, such as CRAs, that obtain criminal history information from the state may only furnish information pertaining to criminal convictions, and are prohibited from including the following in background reports:

an infraction, an arrest or a charge that did not result in a conviction;
a record that has been expunged;
a record indicating a conviction of a Class D felony if the Class D felony conviction has been entered as or converted to a Class A misdemeanor conviction; and
a record that the criminal history provider knows is inaccurate.

Among other significant mandates, criminal history information obtained from the state by CRAs may not include any Indiana criminal record information in an assembled report unless the CRA updates the information to reflect changes to the official record occurring 60 days or more before the date the criminal history report is delivered.

|Employment Decisions|

Vermont is the latest state to restrict credit reports in employment decisions

Effective July 1, 2012, Vermont will be the eighth state to regulate the use of credit-related information for employment purposes. Although similar in many ways to laws already enacted in California, Connecticut, Hawaii, Illinois, Maryland, Oregon and Washington, Vermont’s requirements under Act No. 154 exceed those of other state laws as they prohibit even exempt employers from using an applicant or employee’s credit history as the “sole factor” in employment decisions. Additionally, Vermont exempt employers who take adverse action based in part on a credit history must return the report to the individual or destroy it altogether. Neither the Fair Credit Reporting Act (FCRA) nor any of the other similar state laws imposes such a requirement.

Generally, the Act prohibits employers from inquiring into an applicant’s or employee’s credit report or credit history, and further bans employers from discriminating against or making employment decisions (e.g. hire, fire, alter the compensation or any other term or employment condition) based on a credit report or credit history. Notably, credit history in this context includes credit information obtained from any third party that reflects or pertains to an applicant’s or employee’s “borrowing or repaying behavior, financial condition or ability to meet financial obligations,” even if that information is not contained in a “credit report.”

The trend in restricting credit report use for employment purposes will continue as several other states and the federal government are considering comparable legislation. Soon to follow most likely will be New Jersey. In May 31, 2012, the Senate approved S455 that would prohibit employers from seeking credit checks on employees or applicants under most circumstances. A parallel bill (A2840) was introduced by the Assembly on May 11, 2012, and a similar bill (A704) in December 2011.

|Employment Decisions, Legislation|

What’s the practical meaning of EEOC’s new criminal records guidance?

On April 25, 2012, the U.S. Equal Employment Opportunity Commission (“EEOC”) approved new enforcement guidance regarding the use of arrest and conviction records in employment decisions. The guidance builds on longstanding court decisions and requirements that the EEOC issued over twenty years ago, focusing on employment discrimination based on race and national origin.

In brief, the new guidance’s position is more aggressive, affirming that employers cannot automatically disqualify applicants with criminal records, and that their screening policies need to be consistent and structured for “individual assessment.” The guidance’s main points state that:

An arrest record does not establish that criminal conduct has occurred, and an exclusion based on an arrest, in itself, is not job related and consistent with a business necessity. However, an employer may make an employment decision based on the conduct underlying an arrest if such conduct makes the individual unfit for the particular position.
A conviction record will usually serve as sufficient evidence that a person engaged in a particular conduct. In certain circumstances, however, there may be reasons not to rely on the conviction record alone when making an employment decision.
A violation may occur when an employer treats criminal history information disparately for different applicants or employees, based on their race or national origin (disparate treatment liability). An employer’s neutral policy (e.g., excluding applicants from employment based on certain criminal conduct) also may disproportionately impact protected-class individuals and may violate the law if not job related and consistent with a business necessity (disparate impact liability)

The EEOC specifies two circumstances in which employers will meet the “job related and consistent with a business necessity” defense:

The employer validates the criminal conduct exclusion for the particular position under the Uniform Guidelines on Employee Selection Procedures (i.e., if there is data or analysis about criminal conduct as being related to subsequent work performance or conduct;) or
The employer develops a targeted screen considering at a minimum the nature of the crime, the time elapsed, and the particular job. The employer’s policy then provides an opportunity for an individualized assessment for those individuals identified by the screen to determine if the policy, as applied, is job related and consistent with a business necessity.

The guidance further asserts that although Title VII does not require individualized assessment in all circumstances, the use of a screen that does not include such assessment is more likely to violate its provisions. As an example of individualized assessment process, the EEOC recommends providing the applicants an opportunity to explain why they should not be denied a position due to the criminal record. The guidance also specifies the following factors that employers should assess:

Facts or circumstances surrounding the offense or conduct;
Number of charges of which the individual was convicted;
Older age at the time of conviction, or release from prison;
Evidence that the individual performed the same type of work, post-conviction, with the same or different employer, with no known incidents of criminal conduct;
Length and consistency of employment before and after the offense or conduct;
Rehabilitation efforts, e.g., education/training;
Employment or character references and any other information regarding fitness for the particular position; and
Whether the individual is bonded under a federal, state, or local bonding program.

The guidance recognizes that some employers are subject to federal statutory and/or regulatory requirements that prohibit them from hiring individuals with criminal records for certain positions. The EEOC notes that its new guidance does not preempt such federal guidelines, and explains that employers may be subject to a claim under Title VII if they scrutinize individuals to a higher degree than required under applicable federal requirements.

As in its previous version, the EEOC’s new guidance is not meant to be a deterrent to conducting background checks. But it should serve as a reminder that hiring policies and practices must be structured in compliance with the law.

|Employment Decisions|

“Ban the box” legislation gains momentum

Across the country, municipalities and states are enacting legislation called “ban the box” which generally prohibits employers from asking job candidates about their criminal histories on applications. The legislation also makes it unlawful for a covered employer to take any adverse action against an individual on the basis of an arrest or criminal accusation that did not result in a conviction. The states of California, Connecticut, Hawaii, Massachusetts, Minnesota, and New Mexico have enacted some form of the legislation along with more than 26 cities and counties in Illinois, Maryland, Michigan, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Wisconsin and Washington. (A complete list of municipalities that have “banned the box” is posted at
http://www.nelp.org/page/-/SCLP/2010/BantheBoxcurrent.pdf?nocdn=1).

However, except for Hawaii and Massachusetts, the legislation has been limited to public employers, or public employers and vendors and contractors serving public entities. The city of Philadelphia, which is the most recent addition to this growing list, is the first municipality to pass a law that covers private employers with 10 or more employees. Below are some jurisdictional highlights of the enacted legislation:

Hawaii and Massachusetts private and public employers cannot consider felony convictions that are more than 10 years old. And in Massachusetts, employers are not permitted to consider misdemeanor convictions that are more than five years old.
Hawaii and the cities of Chicago, Hartford, and Cincinnati allow an employer to ask about an applicant’s criminal record only after a conditional offer of employment has been extended.
Chicago, San Francisco, and Boston require a public employer denying employment on the basis of a conviction to justify its decision based on EEOC’s guidelines which include the nature and gravity of the crime, the time that has passed since the conviction, and the relativity of the crime to the position.

Proponents of “ban the box” are confident that the legislation will be a significant factor in lowering recidivism rates, as it will allow applicants to demonstrate their skills and qualifications prior to disclosing criminal histories. And many experts say that such laws will expand beyond the borders of the United States in the very near future.

|Employment Decisions, Legislation|