EEOC Attacks Background Checks

Are Employee Background Checks Racist? EEOC Thinks So
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