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Meeting of November 20, 2008 – Employment Discrimination Faced by Individuals with Arrest and Conviction Records

Statement of Rae T. Vann,
General Counsel,
Equal Employment Advisory Council

Madam Chair, Commissioners Ishimaru, Griffin, Barker and colleagues: On behalf of the Equal Employment Advisory Council (EEAC), I appreciate the opportunity to appear before the Commission to share EEAC’s perspectives regarding the use of arrest and conviction records in the employee selection process. A growing number of businesses now are required by federal law to perform criminal background checks on prospective employees. Many other employers regularly conduct routine criminal background investigations for legitimate business-related reasons, such as avoiding hiring decisions that could pose safety risks to employees or customers, or otherwise harm business operations.

While the use of criminal arrest and/or conviction records to filter job applicants may be appropriate in many circumstances, EEAC member companies recognize the danger in applying rules that arbitrarily exclude from employment anyone who has ever been convicted of a crime, regardless of its seriousness, the length of time that has passed since the offense, or its relationship to successful job performance. EEAC thus commends the Commission on its efforts to raise public awareness regarding the potentially discriminatory effects associated with the misuse of such information in the employment context.

Introduction

EEAC is a nationwide association of employers organized in 1976 to promote sound approaches to the elimination of employment discrimination. Its membership comprises a broad segment of the business community and includes over 300 of the nation’s largest private sector corporations. EEAC’s directors and officers include many of the industry’s leading experts in the field of equal employment opportunity. EEAC’s members are firmly committed to the principles of nondiscrimination and equal employment opportunity.

All of EEAC’s members are subject to Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e et seq., as well as other state and federal laws prohibiting employment discrimination. Because the use of arrest and/or conviction records in the employment context may adversely impact certain protected groups, EEAC member companies are careful to ensure their use of such information is job-related and consistent with business necessity.

EEAC’s testimony today will focus on why employers conduct criminal background investigations on prospective employees, and what procedures can be used to ensure that the legitimate needs of the employee selection process are served in a way that minimizes adverse impact on protected groups, and is consistent with applicable law. In particular, our testimony will center on the use of criminal conviction records as an employment selection procedure. Because the vast majority of EEAC member companies do not routinely rely on records of arrests that do not lead to convictions in making employment selections, that issue will not be covered in detail.

EEAC’s testimony will conclude by offering a number of recommendations for clarifying the Commission’s existing enforcement guidance on the use of conviction records so as to address the various competing interests and legal obligations employers often must weigh in conducting criminal background investigations and relying on their results in making employment decisions.

Background: Federal Laws Increasingly Are Requiring Stringent Criminal Background Investigations

Many EEAC member companies are subject to federal laws requiring that (1) criminal background investigations be performed as part of the selection process and that (2) individuals with certain criminal convictions be disqualified from employment. For instance, Section 19 of the Federal Deposit Insurance Act (FDIA), 12 U.S.C. § 1829, prohibits financial institutions from employing, without the Federal Deposit Insurance Corporation’s prior consent, any person who has been convicted of any criminal offense involving dishonesty, breach of trust or money laundering. Penalties for violation of this provision include fines of up to $1,000,000 per day. 12 U.S.C. § 1833a.

The Violent Crime Control and Law Enforcement Act of 1994, 18 U.S.C. § 1033(e)(1), also makes it unlawful for an insurance company willfully to permit any person who has been convicted of insurance fraud or similar crimes involving dishonesty to participate in the business, unless that person has obtained a letter of consent from the appropriate regulatory agency permitting him or her to engage in the business of insurance. The National Association of Insurance Commissioners (NAIC) broadly construes the term “engaged in the business of insurance,” and thus many insurers consider most, if not all, jobs as falling within the requirements of the Act.

Under the U.S. Patriot Act of 2001, 49 U.S.C. § 5103a, truck drivers with commercial driver’s licenses must undergo criminal background investigations in order to be eligible for a hazardous materials endorsement, a necessary requirement for many commercial trucking jobs. Similarly, the Maritime Transportation Security Act of 2002 (MTSA), 46 U.S.C. § 70105, requires stringent background checks of any worker seeking unaccompanied access to secure areas within the maritime sector. The law also mandates these workers submit to personal and biometric information for tamper-resistant, biometric ID cards, which would be used to verify their identity and eligibility to enter secured or restricted areas of maritime facilities and vessels.

Implementing regulations of the U.S. Transportation Security Administration require covered workers to obtain a Transportation Worker Identification Credential (TWIC) that will be used to verify their identify and to ensure they do not pose a national security risk. Before being issued a TWIC, a worker must undergo a security threat assessment, including a review of his or her criminal history records and immigration status, any recent criminal charges or outstanding warrants, and inclusion on terrorist watch lists. Being convicted of certain crimes such as treason, espionage, sedition, acts of terrorism or conspiracy to commit any such crime would permanently disqualify an applicant from obtaining a TWIC.

Many EEAC member companies indicate that they increasingly are being required to perform rigorous criminal background checks in accordance with these federal laws. Even the U.S. Department of Justice (DOJ), in a 2006 report, recommended that Congress enact federal legislation that would allow private employers access to FBI criminal records databases for the purpose of verifying whether information that an employee or applicant provides is “truthful and complete.” While employer access to such databases is not likely to occur in the near future, the discussion illustrates the security-conscious environment in which employers — particularly federal government contractors — now are operating, which often are in tension with their good faith efforts to minimize the potential adverse impact often associated with use of criminal conviction records.

Even Absent a Statutory Mandate, Many Employers Perform Criminal Background Investigations for Other Legitimate Business-Related Purposes

For those companies that are not specifically required by law to conduct criminal background investigations, many nevertheless routinely do so for legitimate business reasons. In conducting such investigations, however, employers must comply with state laws limiting public access to arrest and conviction records, except under specific circumstances, such as, for instance, where the job involves working with children. Many states that limit public access to information permit consideration of criminal conviction records where job-related and consistent with business necessity, but prohibit the use of records of arrests that do not lead to criminal convictions.

What would motivate employers to conduct criminal background investigations when not statutorily required to do so? Among other things, reviewing criminal conviction history can be critical in determining an applicant’s suitability to perform a specific job, minimizing workplace safety issues, and avoiding legal liability. Employers, for example, can be held liable for “negligent hiring” in instances where someone is injured by an employee who would not have been hired had an adequate background check been conducted. While records of arrests that do not result in conviction ordinarily are not used to disqualify applicants from employment, some federal government contractors advise that they are required to perform more rigorous criminal background investigations for any applicant or employee being considered for a national security clearance, and that the more detailed review may include a review of arrest history.

In the case of criminal convictions, most employers will evaluate that information against the specific job requirements, taking into account whether or not the conviction falls within a specific statutory or regulatory hiring prohibition or otherwise renders the applicant unqualified for the position in question. That determination typically will depend on a number of factors, including the number, type and date(s) of conviction, as well as other unique or mitigating considerations. Some companies have developed matrices or other tools to assist its decision makers or third-party vendors in making employment eligibility determinations.

Some have lists of automatically disqualifying reasons, such as very recent convictions for specific felonies, such as theft, drug distribution, weapons possession and/or violence, and others “carve out” certain offenses that are unrelated to performance of the job in question, such as DUI or domestic violence convictions. Other companies, based on the specific job being performed, may include additional or different convictions on an “ineligible” list. Many of these procedures contain processes by which an applicant deemed ineligible for hire can appeal that determination, or may apply for another position for which the criminal conviction would not be a disqualifying factor.

A few companies do impose blanket, categorical bars on the employment of individuals convicted of very serious crimes where it is determined, based on the nature of the offense, that their employment would pose unacceptable safety or security risks. Disqualification of an employment applicant on those grounds, we believe, would be justified by business necessity in most instances, and thus should insulate the employer from liability for discrimination if adverse impact is shown.

It should be noted that many companies will rescind an employment offer, or terminate a current employee’s employment, if it learns the applicant or employee failed to disclose a criminal conviction on an employment application. In that case, the employment decision is based on falsification of the application, not on the existence of a criminal record itself.

Recommendations

EEAC recognizes the importance of ensuring that criminal conviction records not inappropriately exclude qualified candidates from consideration for employment. On the other hand, the Commission needs to recognize that many employers — especially federal government contractors and those in heavily regulated industries, such as insurance, healthcare, and financial services — are now required to perform detailed criminal bac

kground investigations and to automatically disqualify applicants with certain criminal offenses.

Because of its interest in and commitment to ensuring that its members’ employment practices comply with both the letter and the spirit of the law, EEAC encourages the Commission to update its enforcement guidance on the use of criminal conviction records in the employee selection process to take into account a new statutory and regulatory landscape driven by 21st century issues such as terrorism, workplace violence, identity theft and bank fraud, among others.

Any such guidance should make clear that a number of federal laws and regulations (some of which were discussed above) place strict requirements on employers to conduct criminal background investigations and to disqualify from employment certain offenders, and that an employer’s reliance on those laws will be sufficient to demonstrate business necessity in cases where adverse impact is shown. The Commission should also emphasize that categorical bars on the employment of persons who have been convicted of serious, violent crimes will not violate Title VII, as long the prohibition is job-related and consistent with business necessity.

In addition, while many employment tests and other selection procedures may be well-suited to systemic treatment, we would urge the Commission to treat the use of criminal conviction records differently, because with limited exception, most determinations are made on a case-by-case basis and thus are not likely to affect an entire class of persons in the same manner.

Conclusion

EEAC commends the Commission on its efforts to address potential discrimination associated with the use of criminal arrest and conviction records in the employment selection process. We appreciate the opportunity to provide the agency with our thoughts, which we hope it will consider earnestly as it moves forward in this important endeavor. Thank you.