Fifth Circuit Strikes Down EEOC Guidance that Limited Employer Use of Applicant Criminal Histories

November 13, 2019

In a recent case called State of Texas v. Equal Employment Opportunity Commission, et al., the Fifth Circuit Court of Appeals held unenforceable Guidance from the Equal Employment Opportunity Commission (“EEOC”) that limited an employer’s use of criminal records in hiring.  On its face, the holding might seem to allow employers more freedom to refuse to hire an applicant because of his or her criminal past.  But, the case has significant limitations discussed below.  Employers therefore are still well-advised to tread carefully before asking applicants about their criminal history and to avoid automatic bans on hiring individuals based on an applicant’s criminal convictions.

Here’s what happened:

The EEOC has long been concerned based on hiring data it was seeing, that bans on hiring individuals with criminal records disproportionately prevent minorities, in particular African Americans and Hispanics, from obtaining employment.  In April 2012, the EEOC issued written Guidance that essentially purported to outlaw certain practices concerning use of criminal background information.  More specifically, the EEOC took the position that if an employer’s criminal records screening practice disproportionately impacted individuals of a particular race or other protected class, the employer would be presumed liable for discrimination under Title VII unless the employer could demonstrate the policy or practice was job-related for the position sought and consistent with business necessity.  The Guidance also banned automatic across-the-board exclusions from employment of a particular class or type of crime.  In essence, the Guidance required employers to conduct individualized assessments of every person’s criminal record, using a multi-factor screening system to ascertain whether a certain individual should or should not be hired.

Meanwhile, the State of Texas propounded a strict policy excluding individuals convicted of certain specified categories of felonies from most public jobs.  In 2012, soon after the EEOC issued its Guidance, a person who had been rejected for a Texas Department of Public Safety job filed a complaint with the EEOC challenging Texas’ no-felon hiring policy on the grounds that it had a disparate impact on certain groups in violation of Title VII.  Texas responded by suing the EEOC, claiming that the EEOC Guidance was unenforceable.  The Fifth Circuit took the case up and agreed with Texas.

According to the Fifth Circuit, the EEOC was not authorized to issue its Guidance in the first place because it created substantive legal obligations rather than mere procedural requirements to comply with federal law.  The Court further ruled that the EEOC was barred from enforcing its unauthorized Guidance against Texas or any other employer.

But don’t think that is the end of the story. The Fifth Circuit conceded that while the EEOC could not issue “Guidance” to create binding presumptions of unlawful disparate impact upon employers who use automatic criminal hiring bans, the EEOC could nevertheless sue to enforce Title VII against an employer for anti-criminal hiring practices and prevail if such a ban was proven to have had a disparate impact on any protected class under the statute.

So, where does this leave employers who wish to lawfully implement criminal conviction screenings in their hiring process.  Can employers automatically refuse to hire anyone convicted of felonious sexual assault for example so long as it does not unfairly impact Hispanic applicants?  Can they ask about an employee’s criminal record without any limitation?  The short answer is any “automatic” policy is generally not a good idea as such could lead to substantial liability.  Always apply intelligence to any rule you follow.

For one thing, the Texas case is only the law in the Fifth Circuit, at least for now.  It was decided in a jurisdiction that covers Texas, Louisiana, and Mississippi.   Accordingly, the decision is not binding on New England states.  Until there is a similar decision by the First or Second Circuit which together cover New Hampshire, Massachusetts, Maine, Vermont, Connecticut and Rhode Island, employers operating in these states should continue to comply with the EEOC Guidance to secure its best chance of avoiding a Title VII disparate impact claim of this type.

The Fifth Circuit case also only addressed the narrow issue of whether an employer’s use of criminal histories in hiring violates Title VII.  There are other state and Federal statutes that an employer could violate when relying on criminal histories to make hiring decisions.

For example, many states like Massachusetts have “ban the box” laws which prohibit employers from asking applicants[1] about their criminal histories including arrests or convictions.   Other states like New York, expressly prohibit denying employment based solely an individual’s’ previous conviction(s).  New York employers must go through an individualized assessment to weigh multiple specific factors before denying employment because of an individual’s criminal background.

In 2019, New Hampshire moved closer to passing a “ban the box” although it has not yet become law.  Nevertheless, current New Hampshire law specifies what an employer is allowed ask an applicant.  In an application, a New Hampshire employer may only ask “have you ever been arrested for or convicted of a crime that has not be annulled by the court?”

There are also Federal laws like the Federal Fair Credit Report Act (“FCRA”) that address what an employer can do in terms of asking about applicant’s criminal history.  This FCRA provides for specific procedures that an employer must follow before obtaining a criminal background check from a third-party (like a credit agency) or relying on the report to make an adverse employment decision.

The point here is that employers must understand all of these laws, not just Title VII, when deciding if and how to lawfully use criminal background information in the hiring process.  When considering whether and to what extent you will rely on criminal histories in making hiring decisions in a way that does not run afoul of the law, consider these practice tips:

  • Avoid automatic hiring bans based solely on an applicant’s criminal conviction(s).
  • Omit from your applications a question about someone’s criminal history.
  • Wait until after making a conditional offer of employment to ask about an individual’s criminal background, if at all.
  • Assess each applicant on an individualized basis to determine whether there is a direct relationship between his/her previous criminal offenses and the specific position sought, and whether there exists an unreasonable risk to the safety of property, other employees or the public, in hiring this person given his/her past criminal convictions.  The specific duties of the job, the timing of the criminal conviction, the age of the person when convicted, the number and seriousness of the offenses are just some of the factors that an employer may wish to consider in making this assessment.
  • Uniformly conduct criminal record inquiries, if you decide to use them.  This means you must make sure you ask all prospective employees of the same position about their criminal conviction(s); NEVER selectively ask about conviction histories of only certain individuals because they “look like” they may have a criminal record.
  • Allow the applicant to explain the circumstances of his/her conviction(s) and to correct what may be an inaccurate criminal record, before deciding whether or not to hire the individual.
  • Seek help from legal counsel to understand the risk of liability and balance these risks against the business interest in hiring a person with a criminal past.

[1] In Massachusetts, employers must wait until later in the hiring process (i.e. at an interview or after a conditional offer of employment) to ask about or obtain information about an applicant’s criminal past, and must comply with specific notice requirements for obtaining a criminal record or acting on it in making a hiring decision.