How background checks can backfire

Arrest and conviction records in the EEOC's crosshairs

As an employer, you have the success of your business and the safety of your workforce first and foremost on your mind. So naturally, when hiring new employees you strive to screen out applicants who could negatively impact either—and a criminal background check has likely been an important part of your hiring procedure for years. However, how you screen has just become as important as whether you screen when it comes to checking arrest and conviction records of job applicants.

Pepsi Beverages learned that the hard way this year when it paid $3.13 million to resolve race discrimination charges before the U.S. Equal Employment Opportunity Commission (EEOC). The EEOC's investigation revealed that while neutral on its face, Pepsi's background check policy disproportionately excluded black applicants from permanent employment.

Typical of "disproportionate impact" cases, intent to discriminate was entirely irrelevant. Pepsi (which modified its policy while charges were pending) likely paid the price for having a background check policy that screened out applicants without consideration of the nature, gravity or age of the criminal offense disclosed, or whether the uncovered records posed a legitimate job-related concern for the particular job offered.

To further drive home the message to employers, on April 25, 2012, the EEOC released an "enforcement guidance" that says "[n]ational data supports a finding that criminal record exclusions have a disparate impact based on race and national origin."

The guidance makes it clear that not all criminal record background checks will cross the line. Employers using targeted screens that take into account the nature of the crime, the time elapsed and the nature of the job are more likely to establish that the policy is "job related and consistent with business necessity"—a defense to a charge of discrimination.

In order to minimize the risk of violating the law, employers are warned to:

  • Eliminate policies or practices that screen applicants based on any criminal record.
  • Train managers on proper hiring techniques allowed by the law.
  • Develop specific and narrowly tailored screens based on the specific job offered.
  • Refrain from asking applicants questions about criminal records that would not be relevant to screening for the job sought.

It is clear that a screening process which eliminates applicants based simply on any criminal record, or which is based on arrest records, will not afford an employer any defense to a charge of discriminatory hiring. No employer can rely exclusively on the age-old question: "Have you ever been convicted of a crime?" Pepsi is proof that employers must do more.

The full guidance can be viewed at

If you are interested in determining whether your background check policies and procedures are in line with the new guidance or if you need to develop a policy to implement for your workforce, please contact Jim Grove.

—Jim Grove