One of the first cases filed by the U.S. Equal Employment Opportunity Commission (EEOC) following its 2012 updated guidance on the use of arrest and conviction records in employment decisions has been resolved. Last month, a federal court in South Carolina approved a settlement in which BMW Manufacturing Co., LLC (BMW) agreed to pay $1.6 million and offer jobs to aggrieved African-American former employees and applicants. BMW had already voluntarily changed its criminal conviction policy.

The EEOC filed suit against BMW in 2013 claiming that BMW’s criminal conviction policy was not job related and consistent with business necessity and disproportionately screened out African Americans from employment. BMW used a contractor to provide logistics services at its facility in South Carolina. The workers who provided services to BMW were subject to criminal background checks consistent with the contractor’s policy, which reviewed only convictions from the prior seven years. When BMW switched contractors, the workers were told that they would need to re-apply for employment with the new contractor, and BMW instructed the new contractor to perform criminal background checks on all workers under BMW’s policy. BMW’s criminal convictions policy had no time limitation, excluding from employment all applicants with convictions in certain categories of crimes without regard to whether the conviction was a misdemeanor or felony, the age of the conviction, or the nature or gravity of the individual crime. One hundred incumbent workers, eighty percent of whom were African American, did not pass BMW’s inflexible criminal background check, including many who had worked for BMW for a number of years. All of these workers were denied employment with the new contractor.


Continue Reading The use of criminal background checks to make employment decisions is not without peril

In a harsh rebuke of the EEOC’s method of attempting to prove that Kaplan Higher Education Corp.’s consideration of credit history for hiring in select positions was discriminatory, the Sixth Circuit, only three weeks after oral argument, issued a decision upholding the federal district court’s order excluding the EEOC’s expert opinion from evidence and dismissing

It should be old hat by now: Employers who use a third party to conduct a background check on an applicant or employee for employment purposes must comply with the Fair Credit Reporting Act (FCRA). But what many employers do not know, or may have forgotten, is that the Fair and Accurate Credit Transactions Act (FACTA) also imposes upon them some obligations when conducting a background investigation.
Continue Reading Happy Birthday to the FACTA! The Often Forgotten Law that Imposes Obligations and Provides Helpful Exceptions for Employer Background Checks and Workplace Investigations

I present on the topic of background checks often, and when it comes to Q&A time, I almost always get the question (or some variation of it): "How does Title VII come into play when an employer has state law requirements regarding criminal background checks?" In Waldon v. Cincinnati Public Schools, No. 1:12-CV-00677 (S.D. Ohio Apr. 23, 2013), the Southern District of Ohio shed some light on this particular employer predicament and demonstrates the potential for employment discrimination liability for employers who have overly broad exclusionary hiring policies based on past criminal conduct, even when those policies are required by state law.

In 2007, the Ohio legislature amended a state law to require criminal background checks of all current public school employees, including those not responsible for the care, custody, or control of children. (HB 190, eff. Nov. 14, 2007) According to the law, if an employee had been convicted of any of a number of specified crimes, no matter how far in the past they occurred, nor how little they related to the employee’s present qualifications, the law required the employer to terminate the employee.

To comply with the law, in 2008 the Cincinnati Public Schools terminated 10 employees with criminal convictions, nine of which were African American. Two of those nine, Gregory Waldon, who was found guilty of felonious assault in 1979 and incarcerated for two years, and Eartha Britton, who was convicted in 1983 of acting as a go-between in a $5.00 marijuana deal, sued the school district alleging that the state law had a racially discriminatory impact on African Americans contrary to Title VII and comparable Ohio state law.

The Defendant filed a motion to dismiss asking the court to throw out Plaintiffs’ suit claiming it simply followed Ohio law when it terminated their employment. The Defendant contended it maintained no particular employment practice that caused a disparate impact, and that it was a business necessity for it to follow Ohio law and that to force it to litigate the suit would force it to defend a criminal records policy it had no role in creating.

The terminated employees argued that Title VII trumps state law, such that their terminations were "unlawful employment practices" based on disparate impact" and that compliance with the state law was no defense because a violation is a violation. In Plaintiffs’ view, "whether Defendant was complying in good faith to state law goes to the remedy the Court should ultimately craft, and not to whether the terminations were in violation of Title VII."

The court found that Plaintiff "adequately plead[ed] a case of disparate impact" and that there was "no question that Defendant did not intend to discriminate"; however, the court went on to note that "intent is irrelevant" in a disparate impact case and the practice it "implemented had a greater impact of African-Americans than others."

The biggest issue on briefing was whether Plaintiffs could even attack Defendant’s facially-neutral policy based on the state law mandate. The court rejected "Defendant’s view that the state law must ‘purport’ to discrimination in order to be trumped by Title VII. Such a view would gut the purpose of Title VII …." Quoting Title VII, the court went on to note that an employer may defend against a prima facie showing of disparate impact only by showing that the challenged practice is "job related for the position in question and consistent with business necessity".


Continue Reading Pick Your Poison – Violate State or Federal Law? Court Finds That Complying with State Law On Employee Criminal Background Checks Is Not a Defense to a Title VII Disparate Impact Claim

No, this is not – for those of you old enough to remember I Dream Of Jeannie ­– Major Anthony Nelson suing NASA after all these years.  Instead, a group of Caltech employees assigned to work at NASA’s Jet Propulsion Lab (“JPL”) in California sued NASA when the federal agency insisted that they submit to background checks after, in many cases, having worked there for 20+ years or resign their employment.  The Supreme Court will address the question whether NASA violated the plaintiffs’ constitutional right to informational privacy by (1) requiring the contract employee to answer whether he or she had received counseling or treatment for illegal drug use in the prior year and/or (2) asking the contract employees’ designated references for any adverse information bearing on their suitability to work at a federal facility. 

The case is before the Supreme Court on NASA’s petition for review of the Ninth Circuit’s decision granting a preliminary injunction barring the government from implementing its background checks at JPL.  Oral argument is scheduled for October 5, 2010.


Continue Reading U.S. Supreme Court to Hear Arguments in NASA v. Nelson