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EEOC Files Two New Lawsuits Over Criminal Background Checks

Labor & Employment Law Alert Eric B. Johnson

The Equal Employment Opportunity Commission ("EEOC") has just filed separate lawsuits against BMW and Dollar General alleging that they implemented and utilized criminal background policies that resulted in African American employees and applicants being discriminated against in violation of Title VII of the Civil Rights Act.

In the lawsuit brought against BMW in South Carolina, the EEOC claims that the company maintains a criminal conviction policy that denies facility access to BMW employees and employees of BMW contractors with certain criminal convictions. The policy does not have any time limit applicable to the criminal convictions. For several years, BMW contracted with UTi Integrated Logistics, Inc. ("UTi") to provide logistic services at BMW's South Carolina facility. While UTi maintained a criminal conviction policy for its employees, the policy was limited to the prior seven years. When BMW switched from UTi to another logistics contractor, BMW directed the new contractor to run updated background checks on all UTi employees who would continue to work at BMW's facility for the new contractor. The background checks revealed that various UTi employees had been subject to criminal convictions in the past. BMW subsequently terminated these employees for not complying with its criminal conviction policy. Many of these employees were African American and some had worked at BMW's facility for years. According to the EEOC's press release issued on June 11, 2013, BMW's application of its criminal conviction policy "is a blanket exclusion without any individualized assessment of the nature and gravity of the crimes, the ages of the convictions, or the nature of the claimants' respective positions." As a result of this policy, the EEOC claims that BMW has engaged in unlawful conduct in violation of Title VII.

In the nationwide lawsuit filed against Dollar General by the EEOC in Chicago, the EEOC argues that "Dollar General conditions all of its job offers on criminal background checks, which result in a disparate impact against blacks." According to the EEOC, one applicant to Dollar General was given a conditional employment offer, but it was later revoked due to a six-year-old conviction for possession of a controlled substance. The EEOC further notes that the applicant had disclosed this conviction on her application, and had also indicated that she had previously worked for another discount retailer as a cashier/stocker for four years. The lawsuit also alleges that another applicant to Dollar General was discriminated against when she was denied a position due to a felony conviction, even though the background check was wrong and she had not been convicted of a felony - a fact which she told the Dollar General Store Manager to no avail.

The EEOC's recent lawsuits are just the latest in a series of actions taken by the agency to try and ferret out discrimination resulting from seemingly neutral criminal background policies. Indeed, the EEOC's recent Strategic Enforcement Plan (FY 2013-2016) lists as one of its priorities "Eliminating Barriers in Recruitment and Hiring." Furthermore, in April 2012, the EEOC issued a comprehensive enforcement guidance report entitled "Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964." Notably, the EEOC does recognize that employers may legitimately exclude applicants/employees from certain employment positions based upon their criminal history when doing so is consistent with business necessity. Nevertheless, it provides only two examples of situations where it believes an employer will be able to justify that its policy is consistent with business necessity. First, an employer could validate its criminal conduct screen for the position in question per the Uniform Guidelines on Employee Selection Procedure Standards. Second, an employer could develop targeted screens considering at least the nature of the crime, the time elapsed, and the nature of the job, and then provide an opportunity for an individualized assessment for people excluded by the screen to determine whether the application of the policy is job related and consistent with business necessity.

In conducting an individualized assessment, the EEOC states that an employer may consider, among other things, the following:

  • The facts or circumstances surrounding the offense or conduct;

  • The number of offenses for which the individual was convicted;
  • Older age at time of conviction, or release from prison;1
  • Evidence that the individual performed the same type of work, post conviction, with the same or a different employer, with no known incidents of criminal conduct;
  • The length and consistency of employment history before and after the offense or conduct;
  • Rehabilitation efforts, e.g., education/training;
  • Employment or character references and any other information regarding fitness for the particular position; and
  • Whether the individual is bonded under a federal, state, or local bonding program.

[EEOC Enforcement Guidance, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, at V(B)(9).]

In light of the increasing scrutiny placed on criminal background inquires, employers who conduct these types of background checks may want to re-examine their policies to safeguard against potential discrimination claims by the EEOC and/or employees/applicants. Employers should also be cognizant of any potential state law limitations that may be placed upon the use of such policies as states are increasingly passing legislation on this issue.   

In particular, Wisconsin employers should keep in mind that the Wisconsin Fair Employment Act ("WFEA") prohibits discrimination based on either arrest record or conviction record. The WFEA contains several statutory exceptions that an employer may raise as an affirmative defense to a claim of discrimination on the basis of arrest record or conviction record. The most frequently used exception arises when an employer can show that the circumstances of an individual's arrest or conviction "substantially relate to the circumstances of the particular job." Wis. Stat. ยง111.335(1)(b).   

For more information, please contact Tracy Bradford Farley (Chicago) at (312) 715-5214 /, Mike Fischer (Milwaukee) at (414) 277-5639 /, Fred Gants (Madison) at (608) 283-2618 /, Otto Immel (Naples) at (239) 659-5041 /, Eric Johnson (Phoenix) at (602) 229-5425 / or your Quarles & Brady attorney.

1 According to the EEOC, recidivism rates tend to decline as ex-offenders' ages increase. [EEOC Enforcement Guidance, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, at V(B)(9), n. 122.]