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Meeting of July 18, 2012 – Public Input into the Development of EEOC's Strategic Enforcement Plan

Written Testimony of David Burton
National Small Business Association

My name is David Burton. I am General Counsel of the National Small Business Association. We are pleased to provide our perspective on the Equal Employment Opportunity Commission’s Strategic Plan for Fiscal Years 2012 – 2016. We appreciate your interest in our views.

The National Small Business Association (NSBA) was founded in 1937 to advocate for the interests of small businesses in the U.S. It is the oldest small business organization in the U.S. The NSBA represents more than 150,000 small businesses throughout the country in virtually all industries and of widely varying sizes.

NSBA’s interest in this proceeding stems from its members’ concern that two EEOC initiatives—one dealing with educational attainment requirements and the other with the Commission’s recently announced criminal history guidance—unfairly and unreasonably hinder small businesses when they go about the difficult task of finding the right person for a job and trying to provide a workplace free of harassment, intimidation and violence for their employees, their customers and, in the case of family-owned businesses, their own families.

The EEOC Mission is Important

The EEOC has an important mission. It enforces Title VII of the Civil Rights Act of 1964 which prohibits employment discrimination on the basis of race, color, religion, sex, or national origin; the Age Discrimination in Employment Act of 1967 which prohibits employment discrimination against individuals 40 years of age and older; the Equal Pay Act of 1963 which prohibits discrimination on the basis of sex regarding compensation, section 501 of the Rehabilitation Act of 1973 which prohibits employment discrimination against federal employees and applicants with disabilities; the Americans with Disabilities Act of 1990 which prohibits employment discrimination on the basis of disability; and the Genetic Information Non-Discrimination Act of 2008 which prohibits employment discrimination based on genetic information.

The EEOC Should Focus on Areas Where Discrimination is an Important Problem

Neither the small business community nor the EEOC countenances discrimination. We, like this agency, oppose bigotry. But the issues that I am discussing today do not involve attempted bigotry. Virtually no small businesses are implementing educational attainment requirements or conducting background checks for the purposes of excluding minorities. They are trying to hire qualified employees. They are trying to prevent their employees, their customers and, in the case of family-owned businesses, their own families, from becoming victims of crime. They are trying to avoid liability for crimes committed by employees. And they are trying to limit theft, embezzlement and other property crimes.

The EEOC should focus its enforcement efforts where unlawful discrimination is an important problem. A corollary of that proposition is that it should not expend its resources in areas where it is not an important problem. It should be particularly careful about focusing resources in areas that are not a demonstrated problem and where there are strong countervailing policy reasons for employers to engage in the activities that result in the alleged disparate impact.

Two such areas are employer educational attainment requirements and criminal background checks.

I have conducted a review of the legal and economics literature on these issues. As explained below, they emphatically do not support the proposition that they should be an enforcement priority.

The EEOC Needs to Seriously Rethink the Its Criminal History Guidance

The vast majority of small firms are trying to comply with the law generally and with EEOC guidance in particular. In the current situation, they are unable to do so.

I can assure you that virtually no small business owner is going to be able to read, absorb and apply the 55 page “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964” issued by the EEOC on April 25, 2012. This document includes 167 footnotes containing references to, and discussion of, case law, law review articles, studies and data. Moreover, the Q&As released in connection with this guidance provide little meaningful guidance to a business seeking to apply the EEOC document in practice.1 More importantly, I have had many discussions with sophisticated attorneys who grapple with these issues for a living and work for large law firms advising large corporations. They do not really know how to advise their clients either. If they are at a loss, then small firms and their generalist attorneys will fare no better.

In the real world, small firms and their advisors are not going to be able to understand what the EEOC regards as permissible with respect to the use of criminal background checks. The reason is fairly straight forward. The EEOC has not clearly stated what it wants from the small business community. All the EEOC has done is indicate that it expects small firms to conduct a complex individualized assessment weighing numerous factors regarding the use of conviction records in each hiring decision. How that is to be done in practice is anybody’s guess.

If the goal of the EEOC is to clarify the law by enunciating a clear policy that employers can actually understand and implement, then you need to do better. What business owners have to grapple with now is so opaque and complex that it will, in practice, have to be ignored. The clear and quite understandable concerns about tort liability, worker, customer and family safety and specific state law requirements will take precedence.2 In short, your guidance will not achieve its objective.

NSBA would be happy to work with you to develop a new and better policy that meets our mutual objectives. We urge the EEOC to refrain from enforcing its April 25th guidance and instead revisit the issue. The Commission should begin that process by soliciting public comments on the April 25th guidance. Revised guidance should have specific and clear standards to be used by employers and contain concrete examples of permitted and prohibited activities. We can all presumably agree that if a criminal background check shows a recent conviction for child molestation then a day care center should be permitted to not hire the applicant for a child care job. Similarly, we can probably all agree that a person who was convicted of marijuana possession in the 1960s and otherwise has no convictions should not be barred from a laborer position today. Employers, however, are usually grappling with situations that are not so clear. And the EEOC has an obligation to provide concrete examples of how it wants employers to resolve these issues. It is fundamentally unfair for the EEOC to evade making these decisions in its guidance if it is going to subject employers to enforcement action, in retrospect, for making these difficult judgment calls.

We do not believe that criminal background checks are being misused to any significant degree for an unlawful discriminatory purpose. Workplace violence, on the other hand, is a significant problem. Workplace theft and embezzlement are also major problems. Both can be reduced through proper background screening. According to the Bureau of Justice Statistics, approximately 572,000 nonfatal violent crimes (rape, sexual assault, robbery, and aggravated and simple assault) occurred against persons age 16 or older while they were at work in 2009.3 Workplace violence accounted for 15% of nonfatal violent crime against persons age 16 or older.4 In short, workplace violence remains a very serious problem even though it has declined over the past 15 years.

It is not in an employer’s interest to fail to hire an otherwise qualified applicant because they smoked some marijuana 35 years earlier and got caught. It is not in their interest to fail to hire someone that perhaps got in an altercation years ago and who otherwise has had no problems with the law and has a good employment record. It does not take a major enforcement effort to achieve these results.

A Westlaw search of the law reviews regarding negligent hiring brought up 1300 articles. A similar search on criminal background checks found 900 articles. I confess that I have not read all of them. But those that I did read all had something in common. They had no empirical data regarding criminal background checks being a problem in employment. An anecdote or two (usually involving old drug possession convictions) but no data. They do, however, indicate that the trial bar is quite busy filing negligent hiring lawsuits. The studies and data discussed in the guidance document demonstrate that minorities have higher conviction rates but do not address background checks in hiring decisions.

My review of the existing academic empirical research, which appears to be quite limited, shows that such research does not support the conclusion that criminal background checks are a significant impediment to minority hiring and, in fact, implies strongly that such checks may actually improve the hiring of minorities.5 The true issue is whether minority applicants are being unfairly affected by criminal background checks. In other words, are minority applicants that should be hired (because their criminal background is minor or not relevant) not being hired. Certainly, there is no empirical evidence that this is a significant problem. This should give the Commission some pause about prioritizing this area.

Educational Attainment Requirements Should Not Be an Enforcement Priority

It is our considered opinion that employer high school diploma requirements do not constitute a significant civil rights problem and should not be an enforcement priority. This is particularly true among small firms.

Unlike larger employers who rely heavily on technology, inflexible rules and large HR departments to screen and hire employees in an assembly-line fashion, small businesses carefully consider what qualifications are necessary for a job and the individual characteristics of each applicant. Each position and each employee in a small firm are important to the success of the enterprise. Small businesses make what the EEOC might call an individualized assessment each time they hire someone. The criteria they use are business criteria. Small businesses do not put into place hiring criteria that will unnecessarily screen out qualified employees. It is simply not in the interests of small businesses to do so and flexibility is a hallmark of small firms. Therefore, when a small business does put into place an educational requirement, the EEOC should acknowledge in its enforcement priorities that the considerations important to the EEOC, job relatedness and business necessity, have almost certainly been accounted for by the small employer.

Most jobs in a modern economy require the ability to do arithmetic, to read and understand instructions and to solve problems. This is usually true even of jobs that a highly educated person might regard as being that of a laborer. Workers, nonetheless, often have to use math to calculate proper fits or the proper equipment, material or part to use. They often have to read and understand instructions to properly and safely use equipment or chemicals. They have to be able to solve problems in the field without management input. A high school diploma is a reasonable indicator that a person possesses these qualities. Usually, a person who has earned a high school diploma will perform these tasks better than a person without one. A high school diploma is also an indicator of the person’s ability to stay on task, complete projects and accept instructions.

There is no credible evidence that small businesses discriminate against those without high school diplomas when the skills that high school graduates possess are not relevant to the job. Doing so would deprive an employer of many good potential hires and needlessly raise their costs. Small businesses are not going to go out of their way to raise their costs. Moreover, a review of the economics literature finds nothing to support this proposition. Businesses should be left free to decide what level of educational achievement is necessary for their employees to discharge their job requirements.

It is, after all, patently unclear what would constitute legal proof that a high school diploma “requirement is job related and consistent with business necessity.” Thus, businesses that need people who can do math, read and solve problems will be forced to try to figure this out some other way. It will undoubtedly spawn an army of new consultants helping businesses figure out who has these skills without requiring a high school diploma and force them to spend time and money demonstrating to the satisfaction of the EEOC and some prospective jury in a civil lawsuit that the job actually did require these skills. Those businesses that don’t spend the time and money to hire consultants, consult their attorneys and put a nice “diploma requirement compliance notebook” on their shelf documenting the math, reading and problem solving requirements of every job will be putting themselves at risk of losing a lawsuit. This would include a large proportion of small businesses trying to run their businesses in a difficult economy.

Finally, attacking educational attainment requirements sends the wrong message to our kids. It says to them, “Why bother with school?” It implies that employers that seek educated workers are doing something wrong. It implies that finishing school is not necessary to success because the EEOC will sue firms that fail to hire high school dropouts. This is not the message we want to be sending to our young people.


We urge the Commission to not prioritize enforcement against firms with educational attainment requirements or that conduct criminal background checks unless there is a substantial, factual basis to believe that these requirements have an unlawful purpose.

We also strongly urge the Commission to clarify its guidance with respect to criminal background checks so that the Commission’s expectations are made clear and so businesses can effectively meet those expectations.


1 The overwhelming majority of the Q&A document is dedicated to explaining the EEOC policy-making process and the history of EEOC policy in this area rather than providing meaningful practical guidance to employers.

2 The guidance makes it clear that complying with state or local laws that require criminal background checks or that bar certain felons from specific jobs is not a defense against a Title VII claim. This, of course, puts the employer in the impossible position of having to choose between two conflicting laws. The EEOC should be specific about which state or local laws it finds objectionable on civil rights grounds rather than forcing employers to guess. The guidance does allow that complying with similar federal requirements is a defense.

3 Workplace Violence, 1993-2009 National Crime Victimization Survey and the Census of Fatal Occupational Injuries, U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Statistics, March, 2011.

4 Ibid.

5 See"Perceived Criminality, Criminal Background Checks, and the Racial Hiring Practices of Employers," Harry J.Holzer, Steven Raphael, Michael A.Stoll, Journal of Law and Economics, 49(2), October 2006, pp. 451-80.