Pre-Employment Criminal Background Checks – Proceed, but Proceed with Caution
Due to the increased risk of hiring an employee who has a bad track record, or who appears more likely to become a liability to the employer because of his or her criminal history, many employers routinely perform or are considering performing, criminal background checks of their job applicants. When considering this process, however, an employer is faced with an irreconcilable “Catch 22” situation. On one hand, background checks provide an employer with relevant information concerning the applicant and are helpful for an employer to avoid a negligent hiring lawsuit or economic loss in the future. On the other, the use of criminal background checks can, and has, led to employment discrimination lawsuits in a number of circumstances.
The Equal Employment Opportunity Commission (“EEOC”), various courts, and numerous state and local jurisdictions have weighed in on this legal issue; however, the guidance provided thus far has been mixed.
In April of 2002, the EEOC released its Enforcement Guidance on the “Consideration of Arrest and Conviction Records in Employment Decisions of the Civil Rights Act of 1964,” warning private sector employers of potential litigation for misusing arrest and conviction records when making hiring decisions. Although the EEOC does not suggest that an employer refrain from inquiring into an applicant’s criminal history altogether, it cautions that a discriminatory violation may occur depending upon how an employer chooses to use the information. In essence, the EEOC cautions employers against using blanket employment policies that disqualify applicants solely based upon their criminal background, because such blind disqualification can disparately impact and/or discriminate against applicants because of their race or national origin.
Against this backdrop, and in what appears to be part of a nationwide crackdown on hiring policies that affect minority applicants, the EEOC recently initiated litigation against Pepsi Beverages Co. relating to Pepsi’s pre-employment screening process. In that lawsuit, the EEOC determined that Pepsi’s policy against hiring applicants who had been arrested or convicted of certain minor crimes had a disparate impact upon African Americans. In a settlement that will likely have long-lasting implications for employers nationwide, Pepsi agreed to pay $3.13 million to resolve the EEOC’s charges of race discrimination. More recently, the EEOC made similar allegations against Dollar General Corp. surrounding its criminal background check policy.
As illustrated in these cases, the EEOC has concluded that an employer’s use of a blanket disqualification policy limits employment opportunities for minorities and that an employer’s use of arrest and conviction records to deny employment can be illegal when the underlying records are not relevant to the specific job at issue. The EEOC expects employers to conduct a case-by-case analysis of applicants with criminal histories, and to consider various factors when assessing an applicant’s criminal background.
In Pennsylvania, employers are already prohibited from utilizing blanket policy restrictions regarding criminal background checks as part of the hiring process. Although an employer is permitted to consider felony and misdemeanor convictions when making hiring decisions, such convictions may only be considered in the hiring process if they relate to the applicant’s suitability for a specific job. Therefore, a Pennsylvania employer can only use conviction records to disqualify an applicant if there is proof of a business necessity to do so.
In addition to federal law, several states and cities have implemented restrictions on when an employer can inquire into an applicant’s criminal background. For instance, in July of 2011, Philadelphia enacted an ordinance precluding employers from inquiring into an applicant’s criminal conviction history before and during the application process and through the initial interview. From a practical perspective, Philadelphia’s “Ban the Box” ordinance prohibits queries regarding an applicant’s criminal background until after the initial interview.
In light of evolving federal and state laws, and the discriminatory safeguards established by the EEOC, an employer’s ability to obtain criminal information of applicants is limited. Nonetheless, employers should not be deterred from conducting criminal background checks as part of the pre-employment screening process. If an employer fails to conduct criminal background checks, and subsequently hires a convicted felon with violent tendencies, that employer could be exposed to significant liability. This risk is illustrated by a decision recently issued by the Indiana Court of Appeals in Santelli v. Rahmatullah, in which a motel was successfully sued by the estate of one of its guests who was robbed and murdered by a former employee. Had the motel conducted a criminal background check on the employee, it would have discovered that the employee had a history of violent crimes and theft. This recent example is one of a number of cases where employers have been held liable for the criminal conduct or violent acts of their employees.
In light of all of these issues, what is an employer to do? Given the success rate of the plaintiffs’ bar in pursuing such negligent hiring and retention lawsuits against employers, and the huge increase in lawsuits filed under these theories, an employer would be remiss if it did not consider utilizing criminal background checks as part of its screening process. However, an employer should perform criminal background checks with caution. If you have questions on the proper use of criminal background checks in the pre-employment screening process and/or potential lawsuits relating to this issue, you should contact an attorney to ensure that your company’s policies are consistent with federal and state laws.