SI Review: October 2012


Benefit of Counsel

 Checks by Law

Using criminal records to hire, fire workers

By Marc Freedman

During the process of screening candidates, staffing firms often conduct criminal and credit background checks on their candidates. There are federal laws that cover how each type can be used in hiring decisions. This article addresses criminal background checks.

Title VII of the Civil Rights Act of 1964 is the federal law that, among other things, prohibits covered entities — including staffing firms — from discriminating against applicants and employees based on race, color, ethnicity, disability, age, sex, religion, national origin and any other protected class. The Equal Employment Opportunity Commission (EEOC) enforces Title VII.

To help employers understand the extent to which a candidate’s criminal history can be used to form the basis of a hiring or termination decision, the EEOC released new guidance in April that addresses two types of discrimination that can occur in connection with a covered entity’s use of criminal history information: Disparate treatment and disparate impact.

Disparate treatment. An example of disparate treatment discrimination would be when an applicant or employee in a protected class is treated differently from similarly situated individuals based upon their criminal histories. In other words, the question is whether the entity could somehow be deemed to have intentionally discriminated against a particular individual based upon their criminal history.

Disparate impact. Disparate impact discrimination would involve a situation where, although all applicants and employees were treated the same way based upon their criminal histories, members of a protected class were being disproportionately affected by the entity’s seemingly neutral policies. African-Americans and Hispanics are statistically more likely to have arrest and conviction records than Caucasians. Moreover, even if a company’s policies are job-related and consistent with business necessity, discrimination could still be found where the entity could have used a less discriminatory alternative employment practice, policy or procedure.

Arrest vs. conviction. The EEOC guidance also discusses the difference between arrest records and conviction records. The guidance cautions covered entities against using arrest records since, among other things, they do not establish actual criminal conduct. At the same time, the guidance recognizes that an entity could consider the underlying conduct in connection with an employment decision.

Meanwhile, the EEOC Enforcement Guidance recognizes that conviction records are generally a more reliable source of criminal history information than arrest records, though it still cautions entities because, among other things, criminal conviction records could be incorrect or outdated — and the type of conviction matters in hiring or termination decisions.

The guidance advises that companies that use conviction records in hiring decisions to have a narrowly tailored practice, policy or procedure in place that will “effectively link specific the risks inherent in the duties of a particular position.” A classic example is a person convicted of embezzlement applying for a job as a controller. In this respect, the guidance identifies at least two circumstances under which an entity could meet the “job-related and consistent with business necessity test”: by making a determination in connection with the federal Uniform Guidelines on Employee Selection Procedures or with an individualized assessment. The individualized assessment would involve the individual’s participation, including the possible evaluation of additional information such as: (1) surrounding facts/circumstances; (2) number of convictions; (3) age at the time of conviction/release; (4) performance of similar work post-conviction; (5) pre/post-employment history; (6) rehabilitation; (7) employment/character references; and (8) government bonding.

Beyond Title VII and the EEOC, numerous states also have their own laws governing inquiries.

Staffing firms face further complications because, while their own hiring policies may follow all applicable laws, they may still be exposed to liability if a client refuses to hire or insists on terminating a contingent worker based on an arrest or conviction report. Staffing firms should work closely with their clients to ensure their policies don’t expose them to such risks.

Marc Freedman is an attorney who counsels many staffing firms on a variety of business and legal issues and is general counsel to the New Jersey Staffing Alliance and the National Association of Personnel Services. He can be reached at


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