Can My Business Use Background Checks to Screen Candidates?


The U.S. Equal Employment Opportunity Commission (“EEOC”) recently filed race discrimination lawsuits against two large companies for use of pre-employment criminal background checks.EEOC image

On June 11, 2013, the EEOC filed a lawsuit against Nashville based Dollar General over criminal background checks used in its hiring practices. A copy of the lawsuit can be found here. The EEOC alleges that Dollar General has subjected a class of black job applicants to discrimination because of their race by using criminal justice information in its hiring process. The EEOC claims that Dollar General’s use of background checks has a disparate impact on black applicants because blacks have criminal convictions at a rate disproportionately greater than their representation in the general population.

On the same day, the EEOC filed a similar lawsuit against BMW related to its hiring practices at a manufacturing facility in South Carolina. A copy of the lawsuit can be found here. The EEOC contends that BMW’s criminal conviction policy operates to exclude disproportionate percentages of blacks. The EEOC further claims that the “disparity in the rates at which black and non-black employees . . . lost their employment on account of BMW’s criminal history background check policy is statistically significant.”

In both lawsuits, the EEOC contends that the criminal background checks are unlawful employment practices in violation of Title VII of Civil Rights Act of 1964. The EEOC seeks injunctive relief putting an end to the practices in addition to monetary damages for those affected by the allegedly illegal hiring practices.

In January of this year, I reported on the EEOC’s Strategic Enforcement Plan (“SEP”) for 2013. Priority number one for the EEOC under its SEP:

Eliminating Barriers in Recruitment and Hiring. The EEOC will target class-based recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women, and people with disabilities.

Under its enforcement plan, the EEOC specifically said it would target employers who utilize screening tools, such as pre-employment tests, criminal background checks and similar practices in the hiring process. The lawsuits against Dollar General and BMW demonstrate that the EEOC is acting on its plan and is aggressively enforcing employment anti-discrimination laws with respect to these types of hiring practices.

The central premise of a disparate impact case is that an employer’s employment policy that seems neutral on its face, such as an applicant testing procedure or background check, has the effect of treating individuals in a protected class, such as African-Americans, less favorably. The EEOC has published rather complicated and lengthy enforcement guidelines regarding the use of arrest or conviction records in employment decisions. For employers, a key practice is to ensure that the background check or screening procedure is job-related and consistent with a legitimate business necessity. Further, the EEOC advises that when a report comes back positive, employers should allow the applicant to explain the circumstances of the arrest or conviction to determine whether the conduct underlying the arrest justifies an adverse employment action.

It is important for employers to remember that neither Title VII nor the EEOC enforcement guidelines outright bar the use of pre-employment background checks. However, there is no doubt that the EEOC’s aggressive enforcement in this area creates a great deal of uncertainty and risk for businesses seeking to hire quality employees. Many businesses routinely require criminal background checks for job applicants. Under the current EEOC enforcement environment, it is crucial for employers to understand the law and to ensure that their employment practices, including hiring tests and background checks, are compliant with applicable employment laws. Should you have questions regarding your business’ employment policies or hiring practices, please contact the business litigation and dispute resolution lawyers at Thompson Burton PLLC, who have substantial experience in representing clients before the EEOC and in defending businesses against claims for discrimination based on age, gender, disability and race.