Fifth Circuit to EEOC – Don’t Mess With Texas!

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Fifth Circuit to EEOC – Don’t Mess With Texas!

New Ruling Regarding Criminal History Background Checks on Job Candidates is Law – but Don’t React Too Quickly

By Alonzo Martinez, Associate Counsel, Compliance, HireRight

Note: we welcome you to read Mr. Martinez’ more comprehensive analysis of this situation available on Forbes.com.

As illustrated within HireRight’s compendium of authoritative and up-to-date eBooks, videos, webinars, tip sheets, and other materials on Pay Equity, medical and recreational marijuana, and Ban the Box, laws affecting background checks and hiring continue to evolve, state by state and jurisdiction by jurisdiction. Now a federal agency’s policy concerning background checks has been successfully challenged by the state of Texas. But don’t start modifying your background check policy – at least not yet.

In 2012, the EEOC issued Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964. The agency held that the indiscriminate use of criminal background checks had a significant negative effect on minorities applying for jobs due to statistically-high conviction rates in that group.

Texas fought back, suing the EEOC in November 2013, stating that the Guidance would impact their policies regarding hiring felons for specific state jobs. The state brought the lawsuit after a candidate who applied for a position with the Department of Public Safety was rejected and filed a complaint with the EEOC concerning the state’s “no-felons” hiring policy. Litigation continued over the years and on August 6, 2019, the U.S. Court of Appeals for the Fifth Circuit held that the EEOC did not have the legal authority to create or enforce substantive rules.

 

The decision

The State of Texas prevailed, with the Fifth Circuit holding that the EEOC’s Guidance was in fact a substantive rule, and that the EEOC did not have the authority to issue such a rule. The Court further prohibited the EEOC or the Attorney General from enforcing the EEOC’s guidance against the state.

 

Do you need to change your hiring process to comply?

In short, no — at least not now. The injunction only applies to claims against the state of Texas, although employers throughout America could use the case to defend their policies to not hire job candidates with criminal records. We’ll have to wait and see if other courts agree with the Fifth Circuit’s analysis.

Employers should keep in mind that the EEOC’s Guidance is rooted in the criminal assessment requirements of several jurisdictions with ban the box laws (e.g. those laws that prohibit or delay an employer’s inquiry into a candidate’s criminal history). Making matters even more muddied, several states have passed legislation which requires an employer to demonstrate a rational relationship between an individual’s criminal conduct and the role they’re applying for. This means that the EEOC’s guidance has seeped into statues that can be enforced by their relevant authorities.

Employers shouldn’t rush to change their screening processes as a result of this ruling; the EEOC hasn’t yet issued commentary on this recent decision. We don’t know if they will abide by the Fifth Circuit’s holding or if they’ll proceed with enforcement of their Guidance.

Until employers receive direction from the EEOC or receive clarification from the courts, employers should continue to conduct individualized assessments, avoid accepting hiring rules that automatically disqualify an individual from hire because of their criminal history, and follow state and local regulations that require a thoughtful, considered, and individual examination of a candidate’s convictions as part of the hiring process.

Alonzo Martinez

Alonzo Martinez is Associate Counsel, Compliance at HireRight. Mr. Martinez is responsible for monitoring and advising on key legislative and regulatory developments globally affecting HireRight’s service delivery. His work is focused on ensuring HireRight’s performance as a consumer reporting agency and data processor complies with relevant legal, regulatory, and data furnisher requirements. Mr. Martinez obtained his Juris Doctorate from the University of Colorado, and is licensed by the Supreme Court of the State of Colorado. He is a member of the Colorado Bar Association Employment Law Division, the Association of Corporate Counsel, and the National Association of Professional Background Screeners.

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