Your nonprofit is in the process of hiring a new employee and the final two candidates are an African-American man named Justin and a Caucasian woman named Christina. You conduct a background check using a local reporting agency called CrimeCheck which finds that Justin was arrested as a teenager for drinking in public. Your agency has a long standing policy of not hiring anyone with a criminal record and immediately removes Justin from consideration.   Because of your actions, have you exposed your agency to liability? If so, which candidate's rights have you violated?

The answer is both candidates, and if you're surprised, you're not alone. Specifically, your nonprofit violated California state law by not giving either candidate notice of the background checks and probably also violated Title VII of the Federal Civil Rights Act. Let's turn to the California law first and then to the Federal law.

New California Requirements for Background Check Disclosure

The recently amended Investigative Consumer Reporting Agencies Act (ICRAA) now requires employers who conduct a background check to disclose the following information in writing to any employee or job applicant who is checked, before the report is obtained:

• The fact that a report may be obtained.
• The permissible purpose of the report.
• The fact that the disclosure may include information on the individual's character, reputation, personal characteristics, and mode of living.
• The name, address, telephone number, and a web address where the individual can find information about the reporting agency's privacy practices, including whether the individual's personal information will be sent outside of the United States.

 EEOC Guidance for Employer's Consideration of Criminal Offenses

The Equal Employment Opportunity Commission (the "EEOC") recently issued an Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (the "Guidance"). The main point of the guidance is that employer's may expose themselves to liability if they improperly disqualify a candidate based on a previous arrest or conviction.

Much of the Guidance is already covered by California state law that prohibits any employer from seeking out or using an arrest record (that did not result in conviction) to make a hiring decision (California Labor Code § 432.7). Moreover, employers in California cannot inquire about marijuana convictions that are more than two years old (California Labor Code § 432.8)

But people who have been arrested or convicted for a crime are not a protected class. Why should they have civil rights protection? The reason for this is that under Title VII, a job candidate might have a disparate treatment claim or a disparate impact claim for discrimination. Disparate treatment is commonly referred to as intentional discrimination and would occur if an employer treated minority candidates with criminal histories differently than non-minority applicants (disqualifying all minority applicants but not the non-minority applicants). Disparate impact is more complicated and occurs when a facially neutral policy or procedure has the effect of disadvantaging a protected group. In the context of criminal history, this would occur if members of a minority group had a greater incidence of being convicted, and were therefore disproportionately harmed by an employment policy that disqualified anyone with a conviction.

The EEOC recommends that employers take the following steps to avoid unintentionally committing a disparate impact violation. First an employer may ask about any convictions and do a background search for convictions, but should indicate that a conviction will not automatically disqualify a candidate (unless otherwise indicated by Federal law). This "targeted screening process" would consider such factors as the nature of the convicted crime, the time elapsed since the crime was committed, and the nature of the job. If after considering these factors, the disqualification of the applicant was job related and consistent with business necessity, then the disqualification would probably not lead to a disparate impact claim.

An employer may also avoid liability by "validating" a criminal conduct exclusion for a particular job by showing it is consistent with the EEOC's Uniform Guidelines on Employee Procedures. However, this process can be difficult as it involves knowledge of statistics and validation standards set forth by the American Psychological Association.