By PAUL SPERRY, FOR INVESTOR'S BUSINESS DAILY
The Obama administration has threatened employers that run criminal and credit background checks on job applicants, arguing these are racial "barriers" to hiring — even though federal agencies routinely use them.
Last week the Federal Trade Commission joined with the Equal
Employment Opportunity Commission to tell employers that background checks
could have a "disparate impact" on black people and expose private
firms to lawsuits.
Threatening aggressive enforcement, the agencies released
new compliance guidelines: "Background Checks: What Employers Need to
Know." They advise employers to "take special care when basing employment
decisions on background problems that may be more common among people of a
certain race."
Noting that black men are incarcerated at six times the rate
of white men, the EEOC said African-Americans are far more likely to have a
criminal record that would exclude them from jobs under screening policies.
"The data provides a basis for the commission to
investigate disparate impact charges challenging criminal-record
exclusions" of black job candidates, the agency warned in separate enforcement
guidance. Even "employer's evidence of a racially balanced workforce will
not be enough to disprove disparate impact."
Disparate impact is a controversial civil-rights theory
applied increasingly by the administration, from home loans to school
discipline. It relies on statistics to indicate racism, a much lower standard
of proof than actual acts of racism.
In 2011, the NAACP formally lobbied the commission to apply
disparate impact to background checks and to compel employers to remove the
standard checkbox question on job applications that asks: "Have you ever
been convicted of a felony?"
Nine months later, the EEOC recommended "that employers
not ask about convictions on job applications," it said in its 44-page
enforcement guidance. EEOC Chairwoman Jacqueline Berrien previously worked as a
lawyer at the NAACP.
Employers Defend
Companies argue screening prospective employees for crimes
and credit problems is essential to the hiring process. Besides determining
suitability for employment, it helps protect against theft, embezzlement, fraud
and workplace violence.
More than two-thirds (69%) of employers conduct criminal background checks, while almost half (47%) run credit checks for at least some
positions, a recent Society for Human Resource Management poll found.
Ballard Spahr's Patricia Smith says the new rule "puts
employers between a rock and a hard place." They must hire criminals and
risk liability for their work-related misconduct, or reject such hires and face
a federal or class-action lawsuit.
Lawsuits already are flying. EEOC extracted $3.13
million from PepsiCo in a 2012 settlement after charging the soda and
snacks giant with discriminating against blacks by using criminal background
checks. Pepsi (PEP) also agreed to change its screening policy to
remove "roadblocks" for blacks with criminal histories.
Encouraged, EEOC in 2013 sued BMW and Dollar
General (DG) over their criminal checks.
"BMW's policy had, and continues to have, a significant
disparate impact on black employees and applicants," the EEOC alleged in
its complaint. White people had also been denied jobs via the checks.
EEOC alleges Dollar General broke the law by denying jobs to
black applicants with drug convictions and other felonies, and is engaging in
"ongoing, nationwide race discrimination."
At the same time, the agency is suing Kaplan Higher
Education Corp., which advises college students on financial needs, for using
credit checks to screen candidates for jobs handling sensitive credit
information.
The government claims this also has an unlawfully disparate
impact on African-Americans, who have tended to have more credit problems than
other groups. The companies have vowed to fight the charges.
Disparate Dismissed
A recent court ruling likely gives them hope. Last August, U.S. District Judge Roger Titus threw out EEOC's case vs. Freeman Cos., arguing it failed to prove — even under the disparate-impact standard — that the Maryland employer's criminal and credit checks discriminated against black job applicants.
Titus said such checks are a "rational" part of
the hiring process and blasted the government for condemning "the use of
common sense."
He also pointed out the hypocrisy of suing a private
employer when "the EEOC conducts criminal background investigations as a
condition of employment for all employees, and conducts credit background
checks on approximately 90% of its positions."
Legal analysts say the administration's new policy is based
on the erroneous notion that criminal records are protected under Title VII of
the Civil Rights Act.
"This new guidance is legal fiction," senior
Heritage Foundation legal fellow Hans von Spakovsky said. "Private
industry should not be faced with an expensive case-by-case fight against an
out-of-control federal agency."
Nine state attorneys general urged the EEOC to abandon its
policy in a July letter.
"Race discrimination cannot plausibly be your agency's
actual concern," they said. The EEOC's "true purpose may not be the
correct enforcement of the law, but rather the illegitimate expansion of Title
VII protection to former criminals."
EEOC chief Berrien did not back down, saying in a response
that "to avoid Title VII liability," employers should give black
applicants screened out because of past run-ins with the law a second chance.
Source: Investor's Business Posted 04:31 PM ET
Daily: http://news.investors.com/politics/032714-694866-eeoc-ftc-warn-employers-not-to-run-criminal-or-credit-checks.htm#ixzz2xD7teWKX 
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