The Office of Legislative Research, whom I’ve praised in several posts before (here and here), recently issued a report on the consequences of a felony conviction on employment. 

Overall, it does a good job summarizing the issues when it comes to state employment.

But later on in the publication it states the following when discussing the federal restrictions on employer use of criminal background information:

Asking job applicants to indicate whether they have been convicted of a crime is permissible but Title VII of the Civil Rights Act of 1964 appears to restrict an employer’s ability to use criminal background information in the hiring process (42 USC. § 2000e, et seq.). The Equal Employment Opportunities Commission (EEOC), the federal agency that enforces Title VII, has decided that disqualifying people who have criminal records from jobs is discriminatory because the practice disproportionately affects African American and Hispanic men. (Those two groups generally have higher criminal conviction rates than do Caucasian men.)

The EEOC has ruled repeatedly that covered employers cannot simply bar felons from consideration, but must show that a conviction-based disqualification is justified by “business necessity.” The legal test requires employers to examine the (1) nature and gravity of the offense or offenses, (2) length of time since the conviction or completion of sentence, and (3) nature of the job held or sought. Under this test, employers must consider the job-relatedness of a conviction, the circumstances of the offense, and the number of offenses (EEOC Guidance 915.002, April 25, 2012: http://www.eeoc.gov/laws/guidance/upload/arrest_conviction.pdf).

Back in April, I discussed the EEOC’s latest guidance at length.  As a result, I think the OLR’s report has misstated the EEOC’s position and made it sound like the rules on criminal background check are set in stone at the federal level.  They are not.

Indeed, the EEOC appears to be overreaching in its latest application of Title VII.  Courts have rarely interpreted it this broadly and thus the suggestion that Title VII “appears to restrict an employer’s ability” to use convictions is an overstatement.

Moreover, the OLR report’s suggestion that the EEOC has “ruled repeatedly” on the issue is also misleading; even the EEOC’s report suggests that it differs from some prior guidance.  And, contrary to the OLR report, the EEOC has not “decided” that it is “discriminatory” for employers to disqualify people who have criminal records from jobs; it merely issued guidance on the subject.  Indeed, the EEOC recognizes that there may be instances were it is not discriminatory.

What is important to understand is that “guidance” issued by the EEOC (which is what the April EEOC report is) is not the same as a regulation.  Indeed, even the EEOC says its guidance on criminal history is only “designed to be a resource for employers, employment agencies, and unions covered by Title VII; for applicants and employees; and for EEOC enforcement staff.”  It is not, as the OLR has said, a rule per se. 

A better explanation would be that the EEOC recently issued guidance that suggested to employers the blanket and blind use of background check information could have a disparate impact against some protected classes.  Thus, employers who use such information should consider the business needs of doing so and ensure that the use of such checks is fair. 

From my perspective, employers who seek to use criminal background checks to make hiring decision would be wise to read the guidance itself and seek appropriate counsel.  There are some best practices from the EEOC on the subject, but how employers use that guidance and in what ways, remains up in the air.

The EEOC yesterday released important new guidance for employers on the use of arrest and conviction records by employers under Title VII.  You can read the guidance here as well as a short question-and-answer document too. 

For employers in Connecticut, this new guidance only adds to the state-specific rules we have here in state and should leave most employers scratching their heads about yet another goverment regulation on something that had previously been cleared for use.

You can read my prior posts about the use of criminal records in Connecticut here, here and here.

The EEOC guidance doesn’t go as far as some has feared by banning background checks entirely but it still suggests a plan of action that will be onerous for many employers. 

Now, you may be asking how the EEOC is even involved in this issue given that their realm is typically discrimination cases.  But the EEOC says that they are concerned about two types of actions which may violate federal law. 

There are two ways in which an employer’s use of criminal history information may violate Title VII (“disparate treatment discrimination”). First, Title VII prohibits employers from treating job applicants with the same criminal records differently because of their race, color, religion, sex, or national origin.

Second, even where employers apply criminal record exclusions uniformly, the exclusions may still operate to disproportionately and unjustifiably exclude people of a particular race or national origin (“disparate impact discrimination”). If the employer does not show that such an exclusion is “job related and consistent with business necessity” for the position in question, the exclusion is unlawful under Title VII.

 How can employer  consistently meet the “job related and consistent with business necessity” defense?  The EEOC suggests two situations:

  • The employer validates the criminal conduct exclusion for the position in question in light of the Uniform Guidelines on Employee Selection Procedures (if there is data or analysis about criminal conduct as related to subsequent work performance or behaviors); or
  • The employer develops a targeted screen considering at least the nature of the crime, the time elapsed, and the nature of the job … The employer’s policy then provides an opportunity for an individualized assessment for those people identified by the screen, to determine if the policy as applied is job related and consistent with business necessity.

Of course, the EEOC also notes that such an individualized assessment is not required by Title VII “in all circumstances, the use of a screen that does not include individualized assessment is more likely to violate Title VII.”

As Jon Hyman, of the Ohio Employer’s Law Blog, is quick to note — some of this guidance may be overreaching by the EEOC.  Nevertheless, employers would be wise to read it and consider implementing some of the best practices suggested by the EEOC. Among them:

  • Eliminate policies or practices that exclude people from employment based on any criminal record.
  • Train managers, hiring officials, and decisionmakers about Title VII and its prohibition on employment discrimination.
  • Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
  • Identify essential job requirements and the actual circumstances under which the jobs are performed.
  • Determine the specific offenses that may demonstrate unfitness for performing such jobs.
  • Identify the criminal offenses based on all available evidence.
  • Determine the duration of exclusions for criminal conduct based on all available evidence.
  • Include an individualized assessment.
  • Record the justification for the policy and procedures.
  • Note and keep a record of consultations and research considered in crafting the policy and procedures.
  • Train managers, hiring officials, and decisionmakers on how to implement the policy and procedures consistent with Title VII.
  • When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.
  • Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.

Today, the EEOC has published its final rule clarifying a portion of the Age Discrimination in Employment Act (ADEA).  You can download the rule here and a FAQ from the EEOC here.   The rule comes as a partial response to a 2008 U.S. Supreme Court decision that analyzed the issue. 

The rule has some significance for employers who have policies or take action that may have a disparate impact on older workers. In plain english, disparate impact essentially means an age-neutral rule that affects older workers more than younger workers; disparate treatment means a rule or action that treats older workers differently.

The easiest example to think of is suppose a police department has a physical fitness test so that officers can pursue and apprehend suspects; that practice may have a disparate impact on older workers . 

So what did the final rule clarify? According to the EEOC: Continue Reading EEOC Publishes Final Rule on Reasonable Factors Other Than Age (RFOA)

The Second Circuit today reinstated claims brought by a black firefighter against the City of New Haven alleging that he was unfairly denied promotion to the position of lieutenant because of the city’s scoring of a 2003 promotional exam.  (I covered the original lawsuit back in 2009 here.)

The decision in Briscoe v. City of New Haven (download here) today found that the Supreme Court’s ruling in Ricci v. DeStefano — which seemed to predict (and preclude) a lawsuit like this — did not preclude this lawsuit.

As you may recall, the Ricci decision ordered New Haven to certify the results of a test; that test was not used for promotions resulting in the lawsuit by a group of white firefighters who claimed that the city discriminated against them when it decided not to use the test.

Now the test — which allegedly showed a disparate impact against black testtakers — is being challenged by a black firefighter. The Supreme Court suggested that such a lawsuit should fail:

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

But the Second Circuit said that this language was not controlling and was inconsistent with the rest of the Supreme Court’s findings regarding distinctions between disparate impact and disparate treatment.  In essence, the court said that the City of New Haven ought to have predicted this even before the Supreme Court decided the issue.

We are sympathetic to the effect that this outcome has on the city, which has duly certified the test as ordered by the Supreme Court but now must defend a disparate-impact suit. The City of Birmingham faced the same issue in Martin. Any employer that intentionally discriminates–thinking there is a strong basis in evidence of disparate impact liability–will face the same issue if it loses a disparate impact suit.

The solutions already exist. First, an employer can seek to join all interested parties as required parties. See Fed. R. Civ. P. 19. The interested parties here were readily identifiable: The city could have joined all test takers prior to the district court’s original decision. If Briscoe had been a party, the Supreme Court’s decision would have precluded this suit. Second, an employer can use the expedient provided by Congress, 42 U.S.C. § 2000e-2(n). The city could have moved, prior to the district court’s original ruling, for compliance with the notice and opportunity-to-object requirements of § 2000e-2(n), which would have permitted the litigated judgment to have preclusive effect even over nonparties.

Expect to hear much more about this decision in the upcoming days as it leads to the practical result that both the white AND black firefighters have filed suit based on the same test.

For other employers, the takeaway from this case is that nothing is as simple as it might first appear. When faced with disparate impact lawsuits, think about all the parties who might be affected by the decision and consider bringing them in.   It is truly hard to fault the City of New Haven here; the Ricci case took on a life of its own. But future employers are now on notice that you may not have to worry about the first lawsuit; its the second one that you weren’t expecting that causes the most headaches.

Briscoe v. City of New Haven

Back in March, I reported on the likelihood of a victory for Wal-Mart in an important class action case up at the U.S. Supreme Court.

Court sides with Wal-Mart

This morning, the Supreme Court unanimously rejected the class action against the nation’s largest employer, saying, in essence, that the women who were bringing the sex discrimination charges would have to pursue them on their own.

You can read the court’s full decision here.

As I noted back in March, this case was not about whether Wal-Mart actually discriminated against the women. Instead, the court was merely asked to rule on a procedural question: Can these women bring suit in behalf of more than all 1 million plus women who worked at Wal-Mart. To that question, the court said “no”.

From a legal perspective, what the court was really addressing whether the claims were “common”.  But the court went beyond that, a bit, and that has potentially huge implications in class action discrimination cases going forward:

In this case, proof of commonality necessarily overlaps with respondents’ merits contention that Wal-Mart engages in a pattern or practice of discrimination. That is so because, in resolving an individual’s Title VII claim, the crux of the inquiry is “the reason for a particular employment decision.” Here respondents wish  to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer to the crucial question “why was I disfavored”. …

But the court was split 5-4 on whether the plaintiffs here should be precluded going forward. The majority said yes, rejecting the idea that the statistics here showed what the plaintiffs said or could be used in that fashion.

The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal-Mart’s “policy” of allowing discretion by local supervisors over employment matters.  On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business—one that we have said “should itself raise no inference of discriminatory conduct”.

To be sure, we have recognized that, “in appropriate cases,” giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory—since “an employer’s undisciplined system of subjective decisionmaking [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination.”  But the recognition that this type of Title VII claim “can” exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation—and surely most managers in a corporation that forbids sex discrimination—would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all.

There’s a lot more to this decision and I expect to do a full write-up in an upcoming post.

In addition, the Supreme Court also rejected a First Amendment retaliation claim brought by an employee as well. I’ll have more on that tomorrow.

Last week, a federal district court in Connecticut held that the Department of Corrections violated federal law in instituting a discriminatory physical fitness test that created a disparate impact on women.  It also found that the test was not job-related or necessary.  

In doing so, the court granted summary judgment to the employee and the class of similarly situated job applicants. 

In Easterling v. State of Connecticut (download here), a federal district court held that a requirement that women candidates for promotion be required to complete a 1.5 mile run test was not a necessary job requirement.  

This "disparate impact" case may have important ramifications, particularly if upheld on appeal.

First, the decision relies extensively on the use of statistical evidence. Here the court said that 55% of women passed the test, while 79% of men did.  Thus, the ratio of female passage rate compared to male was 70.6%.  But the court emphasized that the party must still show a cause link.

In doing so, the court first looked at the "four-fifths" rule (or 80 percent) and stated that anything greater than that will typically not be regarded as evidence of an adverse impact.  It is not an automatic rule, but will depend on the circumstances.

The court also said that the second method of establishing causation is a statistical test that "measures that observed differences in outcomes between two groups are attributable to random variation".  The disparity must be typically exceed "two standard deviations".  What does that mean? In plain English it means that there is only a 5% probability that the variance is due to chance at "two standard deviations".  

Second, the case also calls into question the use of some types of physical fitness tests for jobs. Employers who use such tests should consider consulting with counsel about whether the test has a disparate impact and whether the test is necessary at all.  The Court’s decision explains at length that there is a "complex" legal history involved. 

As a practical matter, the case is also notable because it is the very rare case in which the court will grant an employee’s motion for summary judgment.

What’s the Takeaway for Employers?

  • Consider reviewing any physical fitness tests you may institute and consider involving counsel in a review to ensure that such tests do not have a disparate impact on a protected group
  • If such tests are being used, ensure that they are truly "job-related"; consider revising the test to just those elements that can meet the legitimate business expectations of the position
  • If you believe that something might have a disparate impact, don’t rely on the raw numbers; consider the involvement of a statistical expert who can help you better understand items just as the "four fifths" rule or the "two standard deviations". 

Easterling

Back in February, I noted that not all U.S. Supreme Court cases are created equal and warned employers not to get too excited about a case that was then being argued in front of the U.S. Supreme Court — Lewis v. City of Chicago.

Yesterday, the Court released its unanimous decision (download here) in that case. It held that a disparate impact employment discrimination charge filed with the EEOC within 300 days of a discriminatory practice’s application – not merely the announcement of its adoption – will be deemed timely.

The court’s key quote is here:

Employers may face new disparate-impact suits for practices they have used regularly for years. Evidence essential to their business-necessity defenses might be unavailable (or in the case of witnesses’ memories, unreliable) by the time the later suits are brought. And affected employees and prospective employees may not even know they have claims if they are unaware the employer is still applying the disputed practice.

(As an aside, the decision was written by Justice Scalia — countering the prevailing wisdom that he always sides with big businesses.)

What does this mean for employers? It theory, it can mean that employers can now face disparate impact lawsuits significantly later than when a policy that first went unchallenged is implemented. 

But it’s hard to get too worked up about this case. Employers who have consistently reviewed the policies and practices will minimize their risks and the incident that gave rise to a claim here — employment testing — just isn’t that prevalent in the private workplace. 

For various recaps, view these posts here, here and here

In other news, the Court also clarified the rules on when attorneys fees may be issued in ERISA cases. 

There is a common misconception about the U.S. Supreme Court that all cases that it rules on are created equal.  

They’re not. Some take on more significance than others.

Case in point: Lewis v. City of Chicago, which was argued yesterday (transcript available here).  I’ve previously discussed the case in an earlier post

The SCOTUSBlog, as usual, has the details about what the case is about:

At issue is whether the 300-day statute of limitations restricting disparate impact challenges brought pursuant to Title VII of the Civil Rights Act of 1964 is triggered every time an employer makes an employment decision based on results from an impermissible employment examination or instead begins to run only when the test results are first announced. 

Now, according to the WSJ Law Blog, it’s possible that the court could expand its decision to address, what one attorney called "The flip side of Ricci [v. DeStefano" — the firefighter discrimination case against the City of New Haven decided last year.  

But a review of the transcript of yesterday’s oral argument seems to suggest that a more narrow ruling on when certain disparate impact claims can be brought is likely to be the outcome. There’s lots of discussion about the policy behind statute of limitations and the language of Title VII itself. 

What would that mean for employers? Probably not much. An expanded statute of limitations would just create some more headaches more employers and more requirements for record-keeping. But I have a hard time thinking that the Court would be amenable to a open-ended time limitation.  A more restricted reading of the statute wouldn’t change much for employers either.

So, while the the U.S. Supreme Court considers the case (a decision is expected before June), let’s wait and see whether this case will truly be of significance for employers. Or whether it just becomes the topic for academics to discuss in law journals.

Yesterday, a group of black firefighters filed a motion to intervene in the Ricci v. DeStefano case claiming their rights will be "irrevocably impaired " if they aren’t allowed to join in the case.  You can download the motion and the accompanying memorandum of law here

The motion was not unexpected though I’m not sure anyone expected it so soon.

Last Friday, for example, The New Haven Register reported on a new batch of discrimination claims filed at the EEOC on behalf of seven black firefighters who claimed that if the Ricci v. DeStefano lawsuit were to proceed with a trial and the test results certified, it would harm minorities in the job ranks. These firefighters are the ones that have now sought intervention. The black firefighters’ claims are separate and apart from another claim brought by firefighter Michael Briscoe, who is also challenging the decision

As I pointed out in my earlier post and in the article, these claims face a big hurdle to overcome in light of the Supreme Court’s language about how courts should dispose of such claims against New Haven if they were to be brought.  You can download one of the claims directly here.

To overcome the Supreme Court’s language, they claim that they are primarily claiming that they have been treated in a discriminatory fashion, and not merely impacted in a discriminatory way. They also claim that the Supreme Court’s language was merely dictum and not binding on future courts.

How the District Court treats this new filing will no doubt be the subject of lots of speculation in the upcoming days but it is clear that despite efforts by the Ricci parties to work towards a resolution, the case is far from being concluded in one form or another. 

In the meantime, the actual parties in the Ricci v. DeStefano case prepared proposed orders for the District Court to use to implement the decision of the Supreme Court.  You can download them here and here

The parties will now brief two additional issues for the court’s review: (a) the scope and nature of damages to which Plaintiffs are entitled under Title VII, and (b) whether any counts remain for liability adjudication.  The briefing of these issues will be completed in early January 2010.  

 

Well, that didn’t take too long.

Just a few months after the U.S. Supreme Court’s ruling in Ricci v. DeStefano, a black firefighter filed suit yesterday in U.S. District Court alleging that he was unfairly denied promotion to the position of lieutenant because of the city’s scoring of a 2003 promotional exam. 

You can download the complaint here

The case (H/T New Haven Independent) "alleges that the city weighs the oral and written components of the exam differently from how other cities do, in a way that has a disparate impact on African-Americans and resulted in Briscoe being denied promotion."

A lawsuit like this was certainly expected at some point or another.  It was just a question of when. The larger question, however, is what will happen next. After all the Supreme Court, in its Ricci decision, suggested a suit like this might occur and offered a possible defense:

Our holding today clarifies how Title VII applies to resolve competing expectations under the disparate-treatment and disparate-impact provisions. If, after it certifies the test results, the City faces a disparate-impact suit, then in light of our holding today it should be clear that the City would avoid disparate-impact liability based on the strong basis in evidence that, had it not certified the results, it would have been subject to disparate-treatment liability.

This language suggests that the City may indeed have a fair strong defense to this lawsuit but still, it will no doubt be litigating it for some time to come.  There will also be issues of statutes of limitations that may also pop up.

Although the spotlight has turned away from the Ricci case after Justice Sotomayor’s confirmation, this new lawsuit (and potentially others coming) signal a continuation of a drama that has yet to have its final act written.

(Further H/T CT News Junkie)