Double-Check Before You Background Check: Know the Current Legal Landscape Before Conducting Employment Screening


By Elizabeth T. Gross

Many employers conduct some level of background screening on applicants and, at times, current employees.  From the employer perspective, the benefit is clear—employers want to know who they are hiring and avoid potential claims of negligent hiring. 

More and more, however, state and federal laws and the agencies that enforce them are creating obstacles.  “Ban the box” legislation, the Fair Credit Reporting Act (“FCRA”), and the Equal Employment Opportunity Commission’s (“EEOC”) guidance all restrict the information employers can request, how they request it, and how they can use it.  Some employers are throwing up their hands and throwing in the towel.  But employers need not panic.  Although increasingly more complicated, background checks can still be a useful tool—employers just need to be aware of the changing landscape.

First, employers should stay abreast of changes in local and state law.  Has the state or municipality enacted “ban the box” legislation (i.e., a prohibition against asking on an employment application whether an applicant has a criminal record)?  Is such legislation on the horizon?  If so, this question must be removed from job applications.  Even if not, consider removing the question from job applications and requesting the information at a later point in the hiring process.

Second, if background checks are run through a third party, make sure to comply with FCRA requirements.  Among other things, employers must make a disclosure in a separate document to the individual that the background check will be obtained for employment purposes and receive authorization from the individual.  If the decision not to hire the individual is based on the background check, the employer must notify the individual of the adverse action, provide the individual with a summary of rights, and provide the individual with a copy of the background check information on which the decision is based.  The FCRA has additional requirements, as do some states, so it is important to understand all applicable obligations.

Finally, once the background check is run, be careful how it is used.  In August 2012, the EEOC issued enforcement guidance regarding employer use of arrest and conviction records.  The EEOC has long taken the position that an employer’s use of an individual’s criminal history when making employment decisions may violate Title VII of the Civil Rights Act of 1964 (“Title VII”).  The EEOC’s primary concern is discrimination on the basis of race and national origin, because minorities and some ethnic populations have a higher rate of arrest and conviction. 

The EEOC’s position is that a covered employer is liable for violating Title VII when an individual demonstrates that (1) the employer’s neutral policy or practice has the effect of disproportionately screening out a Title VII-protected group (e.g., a blanket policy that the employer will not hire any individual with a criminal record) and (2) the employer fails to demonstrate that the policy or practice is job related for the position in question and consistent with business necessity. 

Employers can establish that an exclusion is job related and consistent with business necessity in two ways: (1) validate the criminal conduct exclusion for the position in question with the EEOC’s Uniform Guidelines on Selection Procedures; or (2) consider the nature of the crime, the time elapsed, and the nature of the job and provide an opportunity for an individualized assessment.

Failure to understand these obligations could cause liability issues for employers.  There has been an uptick in FCRA cases, and the EEOC continues to pursue claims of discrimination based on employers’ background check policies and practices.  Employers, however, can still conduct background checks, but should be mindful of all applicable legal obligations.