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Criminal background checks: Can they get your business in trouble?

As a result of the increasing number of individuals who come into contact with the criminal justice system, a growing number of businesses and government entities are conducting criminal background checks on potential and existing employees. But governments are also putting restrictions in place on what at times can be used or perceived as a discriminatory practice.

For example, Senate Bill 4, which passed the Maryland General Assembly this session, prohibits an appointing authority in the judiciary, executive branch or legislature, with limited exceptions, from inquiring into the criminal record or history of an applicant for employment until that individual has been provided an opportunity to be interviewed. The bill is scheduled to take effect on Oct. 1.

Meanwhile, businesses should be aware that on April 25, 2012, the EEOC issued guidelines recommending that entities conducting criminal background checks implement policies that are job-related and consistent with business necessity before using criminal histories as a basis for employment decisions.

The guidelines are recommendations, not regulations; nevertheless they express the EEOC’s concern over disparate impacts associated with the use of criminal background checks.

It appears that the EEOC intends to vigorously prosecute businesses that discriminate based on their use of criminal history. It is therefore prudent for any entity that intends to conduct criminal background checks — especially those employing 15 people or more — to put into practice a criminal background check policy consistent with the EEOC’s guidelines.

After the flag 

The EEOC guidelines comment upon several methods and policies for performing background checks. The most common, a targeted screening, is a process by which an entity conducts background checks on employees, with their knowledge and consent, and usually considers, at minimum, the nature of the crime, the time elapsed from the commission of the crime, and the nature of the job.

The guidelines recommend that businesses conduct an individualized assessment when a person is flagged during a targeted screening process. The EEOC believes that an individual should be notified that he or she has been screened out because of a criminal conviction, and then, provided an opportunity to explain the circumstances and why he or she should not be precluded from employment. A business would then consider the information concerning the conviction and whether barring employment remains a business necessity.

Individualized assessments, when performed properly, can prevent future legal battles that may be costly. Third-party screening companies that conduct criminal background checks occasionally use incorrect information. An individualized assessment would provide an opportunity to clarify the situation, which in turn, could shield a business from future liability associated with using incorrect information.

The value of a trustworthy and reliable workforce cannot be understated. However, any entity interested in conducting background checks must determine whether they have the time and resources to implement the policies recommended for using background checks.

At the end of the day, an entity may decide to rely instead on interviews, references, and other more traditional methods of screening employees.

The EEOC guidelines should be consulted before making a decision; see:

Andrea Leahy-Fucheck, Esq. and Jason Baum, Esq. are members of Leahy & DeSmet, LLC where they focus their practice on business litigation, intellectual property and employment law.