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The Equal Employment Opportunity Commission (EEOC) says that the state of Texas needs to work on its timing. The agency has filed a motion to dismiss in the lawsuit that Texas brought against the EEOC late last year, claiming that the state has no right to sue and that the timing of the claims are premature. For those of you just tuning in, the entire State of Texas …

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Background Checks in Texas

Earlier this week, Texas Attorney General Greg Abbott filed a legal action challenging the Equal Employment Opportunity Commission (EEOC) “enforcement guidance” that limits the use of criminal records during the hiring process. Texas is a big state, with a big reputation, so it’s fitting that this case is a big deal. The suit hits hard, claiming that EEOC guidelines unlawfully limit the ability of employers – including the State of Texas and its agencies–from excluding convicted felons from employment.

Texas Takes on the EEOC

The suit is the first direct challenge to the EEOC’s controversial criminal background enforcement guidance, which went into effect last April, 2012.  For those who follow EmployeeScreenIQ’s blog, the EEOC guidance on criminal background checks has been a frequent topic. Interestingly, Texas was not one of the states that joined in the recent letter to the EEOC from nine state Attorney’s General that protested the guidance. However, in a similar vein, the Texas complaint challenges the Commission’s statutory authority under Title VII to improperly “bully” the State and its agencies at the expense of the safety of Texans.

State of Texas Law vs. EEOC Guidance

The suit points out that under Texas law, both state agencies and private employers are prohibited from hiring convicted felons or certain types of ex-offenders for jobs that require high levels of security and public trust. The persuasive argument is that the EEOC’s guidance is harmful, damaging to both the state and private employers who are required to conduct background checks under state and federal law.

As the state’s legal action explains: “If state agencies choose to comply with the EEOC’s interpretation, they not only violate state law, but also must begin evaluating and hiring felons to serve in law enforcement, teach in local elementary schools, nurse veterans and the disabled, counsel juvenile detainees, and coach little league.”

In the press conference, Abbott got political, saying this: “Once again, the Obama Administration is overreaching its legal authority by trying to impose hiring rules on states that violate state sovereignty and – in this instance – endanger public safety. Texas has an obligation to enforce its absolute ban on hiring convicted felons for certain jobs, including state troopers, school teachers, and jailers.”

The State of Texas is pushing back—taking issue with the EEOC’s approach of sue first and sort out later, which it says simply encourages disqualified applicants to file discrimination claims in situations where they are simply not qualified. Whether other states will jump into the fray remains to be seen.

The complaint itself asks the federal court for the following relief:

  • A declaratory judgment that the State of Texas and its agencies are entitled to maintain and enforce state laws and policies that absolutely bar convicted felons – or a certain category of convicted felons – from government employment;
  • A declaration that the EEOC cannot enforce its guidelines against the State of Texas – and an injunction that bars the EEOC from issuing right-to-sue letters to persons seeking to pursue this type of discrimination charge against the State of Texas or any of its agencies;
  • a judgment holding unlawful and setting aside the EEOC’s hiring guidelines.

I will be tracking this one closely—as will employers in Texas and across the US.

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You might recall that back in 2011 a federal judge ordered the Equal Employment Opportunity Commission (EEOC) to reimburse the staffing company, PeopleMark, for over $750,000 worth of legal fees and expert witness costs it incurred as a result of  overzealous prosecution tactics concerning their employment background check practices.

The premise of the case was the EEOC’s contention that PeopleMark automatically rejected candidates that had criminal records.  Even worse was that they ignored evidence that would have torpedoed their case. The EEOC put together a list of 286 applicants they said were denied employment based on PeopleMark’s blanket policy.  Evidently, they wouldn’t release the names of these applicants until they were compelled to do so by the court. When PeopleMark received the list, they discovered that 22% of these applicants with criminal records were actually hired.  They even notified the EEOC of this fact, yet the EEOC continued to pursue the case.

EEOC appealed the court’s ruling to the Sixth Circuit court and earlier this week [...]

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Since the Equal Employment Opportunity Commission (EEOC) introduced new guidelines in April of 2012, employers have had quite a bit of confusion about how this affects their use of employment background checks. With increased enforcement of these guidelines, employers should not only have a solid understanding of what they are, but also how to implement them into their hiring policy. EmployeeScreenIQ panelists, Nick, Jason, and Angela discuss the struggles related to the guidance and provide best practices to help employers remain compliant within the hiring process.

This episode of the Quick Takes Series covers the ever-popular, and ever-confusing topic of the latest guidelines from the EEOC.

For a recap, what are the requirements?

  • If a criminal background check is done on an applicant, the employer must consider job relatedness-for example, would the criminal record prevent the potential employee from performing the job well?
  • Each applicant should be provided an individual assessment. So if they do have a criminal record, essentially the employer must give them a chance to explain the criminal offense.

Nick also asks the pointed question, What if an employer doesn’t want to hire an applicant, regardless of their criminal record? Again, there’s no clear answer for this. The best option for employers is to have the best documentation possible, but know that this could still lead to an EEOC investigation.

In addition, Jason recommends being as transparent with the applicant as possible. While seemingly simple advice, giving the candidate as much insight as possible into the background screening process will provide a smooth process for both employers and the applicant. Additionally, companies should always, always speak with legal counsel regarding their hiring process and company policy.

The Bottom Line?

Employers, you must follow the guidance, but because the requirements are still somewhat confusing, consult your legal counsel.

Related EmployeeScreenIQ Content:

Quick Takes is a video series blending together bits of experience and expertise from EmployeeScreenIQ’s background screening experts. With a newsroom feel, discussions surround the latest issues in the background screening industry. All of the videos were filmed unscripted-giving you the opportunity to hear genuine responses from the professionals. Topics range from social media background checks to conducting a thorough criminal records search. We’re releasing a new video every month, so stay tuned.

 

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11

EEOC Employment Background Checks

Make sure to read the words in this word cloud carefully. “Laughable”. “Unreliable”. “Mind Boggling”.

Those are the words Judge Roger Titus of the U.S. District Court in Maryland used when he dismissed the Equal Employment Opportunity Commission’s (EEOC) case against Freeman Companies for what the commission alleged as discriminatory hiring practices related to Freeman’s use of criminal background checks and credit reports.  I’ve included a copy of Freeman’s press release for their take on the case because the EEOC didn’t see fit to allow them to respond when they announced “this egregious” case.

The outcome of this case is no surprise; so far the courts have not been swayed by the EEOC’s arguments in similar cases (see EEOC v Kaplan Higher Education).  What is shocking is that the EEOC has now suffered another embarrassing setback in their quest to punish employers for their reliance on employment background checks (see EEOC v PeopleMark).

Add the recent efforts of nine state Attorneys General who have taken the EEOC to task for what they deem to be misguided and an example of gross federal overreach for their lawsuits against BMW and Dollar General and you begin to see that the courts seem to be protecting employers’ responsible use of employment background checks.  I am hopeful that the EEOC will reassess their tactics and focus their energies on real instances of discrimination.

Seyfarth Shaw’s Pam Devata, Gerald Maatman Jr. and Howard Wexler did a remarkable job of explaining the judge’s ruling and the anticipated effect it will have on employers.  See below.

Court Dismisses EEOC’s Background Check Lawsuit Based On Its Reliance On “Laughable” And “Unreliable” Expert Report Filled Of “Errors and Analytical Fallacies”

In a scathing opinion issued today in EEOC v. Freeman,No. 09-CV-2573 (D. Md. Aug. 9, 2013), Judge Roger Titus of the U.S. District Court for the District of Maryland dismissed a nationwide pattern or practice lawsuit brought by the EEOC (previously discussed here and here) that alleged that Freeman, Inc., a service provider for corporate events, unlawfully relied upon credit and criminal background checks that caused a disparate impact against African-American, Hispanic, and male job applicants. This decision marks yet another blow to the EEOC’s use of systemic lawsuits to challenge employers’ reliance on background checks in making hiring decisions.

The Court’s Opinion

Prior to analyzing the EEOC’s disparate impact claim, Judge Titus discussed the utility of credit and criminal background checks, as well as the EEOC’s recent targeting of employers for such background checks, including the recent cases it filed against BMW and Dollar General Corp. In discussing these lawsuits, Judge Titus noted that:

“Because of the higher rate of incarceration of African-Americans than Caucasians, indiscriminate use of criminal history information might have the predictable result of excluding African-Americans at a higher rate than Caucasian. Indeed, the higher rate might cause one to fear that any use of criminal history information would be in violation of Title VII.  However, this is simply not the case. Careful and appropriate use of criminal history information is an important, and in many cases essential, part of the employment process of employers throughout the United States. As Freeman points out, even the EEOC conducts criminal background investigations as a condition of employment for all positions, and conducts credit background checks on approximately 90 percent of its positions.”

Id. at 2. Turning to the specific case before him, Judge Titus focused on whether the EEOC provided the requisite evidentiary foundation that Freeman’s policies had a disparate impact based on reliable and accurate statistical analysis. Judge Titus held that the EEOC had not made such a showing and spent a majority of his 32-page ruling bashing the “expert” reports prepared by Dr. Kevin R. Murphy, the EEOC’s statistical expert. This is not the first time a U.S. District Court Judge has criticized the EEOC’s reliance on Dr. Murphy’s statistical analysis.  As previously reported here, Judge Patricia A. Gaughan of the U.S. District Court for the Northern District of Ohio granted summary judgment to the defense in EEOC v. Kaplan Higher Education Corp. (discussed here) – in part based on the “great concern” she had regarding several aspects of Dr. Murphy’s disparate impact analysis in that case.

Judge Titus pulled no punches in taking the EEOC to task based on the flaws in the data it relied upon in support of its disparate impact claims, labeling Dr. Murphy’s expert reports as:  “laughable”; “based on unreliable data”;  “rife with analytical error”; containing “a plethora of errors and analytical fallacies” and a “mind-boggling number of errors”; “completely unreliable”; “so full of material flaws that any evidence of disparate impact derived from an analysis of its contents must necessarily be disregarded”; “distorted”;  “both over and under inclusive”; “cherry-picked”; “worthless”; and “an egregious example of scientific dishonesty.” Id. at 14-20.

Given Dr. Murphy’s “continued pattern of producing a skewed database plagued by material fallacies” the EEOC left Judge Titus with “no choice but to entirely disregard his disparate impact analysis.” Id. at 24-25. Left without credible expert analysis, Judge Titus held that the EEOC’s case cannot survive as “it is sufficient for Defendants to point out the numerous fallacies in Murphy’s report, which raise the specter of unreliability” to defeat the EEOC’s prima facie case. Id. at 24.

Finally, Judge Titus held that even putting aside the unreliability of Dr. Murphy’s expert reports, the EEOC nonetheless failed to identify the specific policy or policies causing the alleged disparate impact and made “no effort to break down what is clearly a multi-faceted, multi-step policy.” As the EEOC could not demonstrate “which such factor is the alleged culprit” of the purported disparate impact, Judge Titus held that the EEOC failed to meets its prima facie case of discrimination. Id. at 25-28.

Implications for Employers

The defeat of the EEOC’s case is significant. Judge Titus’ decision is yet another favorable opinion for employers who fall victim to the EEOC’s “do as I say, not as I do” litigation tactics, especially in pattern or practice cases that rely heavily on the use of statistical analysis. While the criticism of Dr. Murphy’s statistical analysis is noteworthy given his use as an expert in many of the EEOC’s larger cases, an equally important take-away for employers is the fact that Judge Titus rejected the EEOC’s argument that it had no duty to identify the specific aspect of Freeman’s policies that caused the alleged disparate impact and could merely rely upon the policy in general in support of its claims – a tactic frequently advanced by the EEOC in these type of cases.

Given the magnitude of this decision, it is possible (if not likely) the EEOC will appeal Judge Titus’ decision, and we will keep you posted with any further updates regarding this important systematic case.

 

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Equal Employment Opportunity Commission

In an interesting turn of events, nine State Attorneys General are fighting back against the EEOC Criminal Record Guidance.  These states include; West Virginia, Montana, Alabama, Nebraska, Colorado, South Carolina, Georgia, Utah and Kansas.   It seems their reactions are directly tied to the Dollar General and BMW suits filed by the EEOC last month.  The letter goes as far to say; “We believe that these lawsuits and your application of the law, as articulated through your enforcement guidance, are misguided and a quintessential example of gross federal overreach.”

I am actually surprised by this letter.  I am surprised that ONLY nine states decided to participate.  To me, one of the most troubling aspects of the new guidance is the safe harbor and preemption of federal statues that regulate what criminal records can and can’t be used.  The guidance is pretty clear that this safe harbor only applies to federal mandates and excludes state law. What does this mean? Well if the federal law says you can’t hire someone with (insert example) record, you are safe, but if state law says you can’t hire someone with <Insert better example> you are left twisting in the wind!  So ladies and gentleman, as far as the EEOC is concerned, you are damned if you do, and damned if you don’t. This, in my humble opinion, is the area all states should be screaming about! OK, end of rant, back to the letter…

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JB Hunt Transport

Transportation giant J.B. Hunt Transport, Inc. has entered into a settlement with the U.S. Equal Employment Opportunity Commission (EEOC), over charges of racial discrimination based on a criminal background check. In a statement issued by the Commission, the EEOC claims that J.B. Hunt discriminated against an African-American job candidate who was denied a truck driver position at a J.B. Hunt facility in San Bernardino in 2009. The agency claims that the company denied employment based on a criminal conviction record that was unrelated to the duties of the job. The alleged victim has entered into a private settlement agreement with J.B. Hunt.

In addition to the specific allegations in the San Bernardino incident, the EEOC investigated the company’s broad policies and warned against the use of blanket prohibitions that disqualify candidates with criminal records. The EEOC news release cites its policy guidance which was reissued on April 25, 2012.

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Employment Background Checks

 

 

 

 

 

 

 

For those of you interested in keeping up with the latest in compliance for pre-employment background screening and the laws that affect your use of employee background checks, follow our publication, “BTW: Your Guide to Staying Out of Hot Water.” This compliance resource has been created by our VP of Compliance and General Counsel, Angela Preston and is a must-read for human resources and security professionals.

Our June By The Way issue features the recent EEOC case against Dollar General and BMW. As you’ve probably heard, the EEOC filed two lawsuits in federal courts in Illinois and South Carolina, accusing BMW and Dollar General of discriminatory use of criminal background checks. For more details, read Angela’s article, EEOC Targets Dollar General and BMW for Criminal Background Checks.

EEOC vs. Dollar General & BMW

 

 

 

 

 

 

 

In the article, Stuck In the Middle: Title VII Conflicts with State Law in Ohio Federal Case, Angela discusses a conflict in an Ohio case where an employer followed the state law, but in doing so, violated Title VII of the Civil Rights Act. Last but not least, this issue includes an update on two cities and a state that have recently adopted ban-the-box legislation in Jumping Aboard the “Ban” Wagon: Seattle, Buffalo and Minnesota Agree to Ban-the-Box.

Watch Angela’s summary of this month’s issue:

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EEOC and background checks

I have taken a long hiatus from posting to our blog.  There are several reasons, time is one of them but mostly because of the wonderful bloggers we now have; Nick, Angela, Lauren and Kevin have done a great job!  Don’t ask Nick, he’ll tell you its because he is tired of correcting my horrible writing skills. (Shameless plug to the best editor and ghost writer we have!) I am coming out of retirement, probably temporarily, because I just read the best article I have yet to see on the new EEOC Guidance in Forbes Magazine.  I’ll save the commentary because it stands on its own, I will however highlight my favorite quotes below!  If you have not been following our excellent reporting on this issue, now is your chance, this is the one article you should read!

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EEOC vs. Dollar General & BMW

The EEOC continued its crusade to fight discrimination by way of litigation this week. The agency has filed two lawsuits in federal courts in Illinois and South Carolina, accusing BMW and Dollar General of discriminatory use of criminal background checks. These lawsuits open a new chapter in the continued debate over the use of criminal background checks in the hiring process. The commission is claiming that both companies have implemented criminal background screening policies that have the effect of discriminating against black applicants.

Background on the EEOC Guidance

These cases are the first significant cases to test the commission’s new guidance for the use of criminal background checks. The guidance, issued in April of 2012, has sparked controversy and confusion over when and how criminal background checks can and should be used. The guidance came out on the heels of some substantial settlements, including a $3.1M payout by Pepsi, based on the EEOC’s theory that certain policies, while neutral on their face, have the effect of discriminating against blacks and other minorities. The agency announced earlier this year that it would continue to focus on enforcement of the guidance, suing big employers for systemic discrimination by filing “disparate impact” cases. And true to their word, here are two new cases to test their theories.

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