Five Takeaways for Employers Screening Job Candidates Who May Have a Criminal History

The Equal Employment Opportunity Commission’s (EEOC) recent lawsuit against a convenience store operator over its policy against hiring job applicants with a criminal background is a reminder to all employers to focus on this initial hiring issue. According to the EEOC, it is a violation of Title VII of the Civil Rights Act of 1964 (Title VII) for an employer to screen out a Title VII-protected group of applicants for employment based on criminal history, even if the policy is facially neutral, without showing that the policy is job-related for the position in question and consistent with business needs. The EEOC's stance is that such a policy violates Title VII if it has a disproportionate impact upon a class of minority applicants.

Recently, the EEOC showed its commitment to that stance by filing a lawsuit in federal court in Maryland against Sheetz, Inc., Sheetz Distribution Services, LLC, and CLI Transport, LP (collectively, Sheetz). Sheetz has 23,000 employees and operates 600 convenience store locations across six states. 

This case was only filed recently, and Sheetz has not yet filed a response to the EEOC’s complaint.  In a published statement, Sheetz stated that it “does not tolerate discrimination of any kind” and that it has attempted to work with the EEOC to resolve the dispute before the lawsuit was filed. 

In its complaint, the EEOC alleged that since 2015, Sheetz has enforced a practice requiring all job applicants, regardless of the job, to pass a review of information about their criminal justice history, including, but not limited to, convictions that Sheetz obtains through questions on its job application and a background check conducted by a third-party vendor. The EEOC alleged Sheetz then decided whether job applicants were deemed to have passed or failed the review — and those who failed were refused employment for all jobs. The EEOC further alleged the Sheetz employees who made these decisions did not need to contact job applicants to notify them of the decision or to request more information or an explanation, and these decisions were not reviewed by any management official. 

The EEOC has asserted that Sheetz’s policy violated Title VII not because Sheetz was intentionally discriminating, but because the policy had a disparate impact upon Black, American Indians/Alaskan native, and multi-racial job applicants.  For example, Black job applicants allegedly failed the criminal justice history screening and then were denied employment at a rate exceeding 14.5%, while White applicants failed at a rate of under 8%. 

Key takeaways for employers: 

• Before considering asking applicants about their criminal history, employers first should be aware of applicable state or local laws that may prohibit those questions entirely or limit their timing or scope (“ban the box” laws).
• Even where inquiring into an applicant’s criminal background is permissible, employers should avoid a blanket disqualification policy based on the person’s record.
• Employers should weigh an applicant’s criminal history with all other reasonable, permissible job factors to make an assessment of both the applicant and the job before making a hiring decision.
• Some factors to consider in the assessment:
  • Type of conviction (e.g. Was it a non-violent offense? Was it fraud-based?).
  • Length of time since the conviction.
  • If applicable, the length of time that has passed since the applicant completed any prison sentence or other penalties.
  • Duties and responsibilities of the available job and how relevant the offense is to those duties.
• Employers conducting a background check using a third-party should ensure they are complying with all the technical requirements of the federal Fair Credit Reporting Act.

Please contact Michael E. Turner or any member of Phelps’ Labor and Employment team if you have questions or need compliance advice or guidance.