TOP TIP: EEOC’s Criminal Background Check Guidance Enjoined by Fifth Circuit – What Does This Mean for Employers?

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The U.S. Court of Appeals for the Fifth Circuit found that the Equal Employment Opportunity Commission exceeded its authority when it issued its “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII,” and the Fifth Circuit therefore prohibited enforcement of the Guidance against the State of Texas. The impact of this decision on other employers is less clear.

The EEOC’s Guidance was issued in 2012 to replace some earlier policy statements on this issue, following a 2007 federal court decision that criticized those earlier guidelines. While the EEOC reiterated its consistent position that employers must consider (1) the nature of the crime, (2) the time elapsed, and (3) the nature of the job, it further suggested that employers should conduct an “individualized assessment” with regard to each applicant to determine if the policy as applied is job related and consistent with business necessity. With regard to this individualized assessment, the EEOC provided in the 2012 Guidance a new list of factors that employers should consider (claiming all the while that it was simply compiling past information):

  • The facts or circumstances surrounding the offense or conduct.
  • The number of offenses for 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 a different employer, with no known incidents of criminal conduct.
  • The length and consistency of employment history 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.
  • Whether the individual is bonded under a federal, state, or local bonding program.

At the time that the EEOC released its Guidance, we blogged about the impact of this, stating that, “The bottom line is that the Commission’s claim that the updated rules do not reflect a substantive change in its enforcement policy or the guidelines it expects the courts to apply is disingenuous.” Nonetheless, the EEOC has relied upon this guidance in bringing suit against a number of employers over their background check policies.

In State of Texas v. EEOC, a lawsuit brought by the EEOC challenging the State’s ban on hiring felons in certain State agencies, the State questioned the EEOC’s authority to issue the Guidance. The Fifth Circuit agreed with Texas that the Guidance was a substantive rulemaking that is subject to legally required notice and opportunity for public comment under the Administrative Procedures Act, with which the EEOC had not complied. The Fifth Circuit barred the EEOC from enforcing its Guidance against the State.

As for other employers, those in the Fifth Circuit would arguably be covered by this ruling, but it is not binding as to employers outside of that jurisdiction. Consequently, we would expect the EEOC to continue to apply the Guidance in other jurisdictions. While those other employers could similarly argue that the Guidance is unenforceable, it is possible that a different court could side with the EEOC. But even if the Guidance were ultimately found to be wholly unenforceable, the general principles articulated in it, which are drawn from prior caselaw, may still be applicable to a discrimination claim. Thus, employers should continue to be thoughtful when considering an applicant or employee’s criminal background, and should do so on an individualized basis.