Traps for the Unwary: Arrest Records & Employment

November 13, 2012

Unfortunately, operating a business in America today involves navigating a legal minefield. Unexpected legal liability or expensive litigation can ensnare businesses that do not know the law. And the law can be absurdly complex and counter-intuitive.

“Traps for the Unwary” is a new series NSBA will produce from time to time designed to help small-business owners and managers avoid legal pitfalls. We will cover a wide variety of subjects including labor, employment, occupational safety, tax, employee benefits, securities, business entity, intellectual property, immigration, federal contracting, contract and tort law. This series is aimed at offering insight, and should not be construed as legal advice.

Traps for the Unwary: The Use of Arrest Records in Employment Decisions
November 13, 201

Many employers conduct criminal background checks on potential employees, particularly if the prospective employee will be visiting customers’ homes, handling money or privy to sensitive information (e.g. customer credit card numbers).  Employers do not have a free hand in this area.

The U.S. Equal Employment Opportunity Commission (EEOC) has recently (April 25, 2012) issued “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”  This “guidance” is so complex and ambiguous that it provides very little guidance.  But it appears that the EEOC has launched over 150 investigations, and enforcement in this area has been designated one of its “strategic priorities.”

The guidance does make one thing reasonably clear.  Making hiring decisions based on arrest records alone probably constitutes a violation of Title VII of the Civil Rights Act (which prohibits discrimination on the basis of race, color, religion, sex or national origin).  The EEOC Office of Legal Counsel states:

The fact of an arrest does not establish that criminal conduct has occurred. Arrests are not proof of criminal conduct. Many arrests do not result in criminal charges, or the charges are dismissed. Even if an individual is charged and subsequently prosecuted, he is presumed innocent unless proven guilty.

Only if the employer has another valid independent reason for believing that the conduct which led to the arrest actually occurred would the employer be legally justified in not hiring the prospective employee (or promoting an existing employee).  For example, if the arrest involved conduct on the work-site and the employer’s internal investigation of that conduct reasonably leads them to believe that unlawful conduct actually occurred and that conduct is relevant to the position in question  and excluding that person is a “business necessity,” then the employer may deny the applicant the position.

Thus, in most cases, using an arrest as a reason not to hire a member of a protected group will put the employer at risk of EEOC enforcement action and a private lawsuit.

NSBA will address the difficult issue of how to use conviction records in hiring decisions in the coming months.  For those readers who would like more information, click here to read the EEOC guidance.

For questions on the policy, please contact NSBA General Counsel David R. Burton at DBurton@nsba.biz.

NSBA cannot give legal advice with respect to specific situations.