On November 18, 2019, the Equal Employment Opportunity Commission (EEOC) issued a news release detailing the settlement between them and the major retail chain, Dollar General. The settlement was the result of a lawsuit filed against Dollar General by the EEOC wherein they claimed that the company violated Title VII of the Civil Rights Act by denying employment to African Americans at a higher rate than white applicants, based on the company’s practice and use of a broad criminal background check.

As part of the settlement, Dollar General agreed to pay $6 million into a settlement fund for African American applicants who lost out on an employment opportunity between 2004 and 2019. Moreover, the terms of the settlement require Dollar General to hire a criminology consultant if they choose to continue using criminal background checks during its hiring process. The modified criminal background check process must be based on “several factors including the time since conviction, the number of offenses, the nature and gravity of the offense(s), and the risk of recidivism.”

employee background check

While it is common for employers to use criminal background checks during the hiring process, such use does come with an inherent risk of legal liability, as evidenced by the case discussed above. Generally, there are two ways that Title VII violations occur in the context of background checks. First, an employer violates Title VII when they treat an applicant differently because of their race, national origin, or another protected basis. An example from the EEOC’s Enforcement Guidance is where an employer rejected an African American applicant based on his or her criminal record, but hired a similarly situated white applicant, who had a similar criminal record. This is referred to as disparate treatment discrimination.

The second way a Title VII violation can occur is when there is evidence that an employer’s policy or practice on background checks disproportionately screens out a Title VII-protected group and the employer fails to demonstrate that the policy or practice is job-related for the position in question and consistent with business necessity. This is referred to as disparate impact discrimination and served as the basis of the EEOC’s claims against Dollar General.

Disparate impact discrimination occurs with the use of criminal background checks primarily because of the statistical differences in the rate of arrests and incarcerations of African American and Hispanic populations as compared to the white population in the United States. Nationally, African Americans and Hispanics are arrested and incarcerated at rates disproportionate to their representation in the general population. As a result, the EEOC has essentially concluded that criminal record exclusions will likely have a disparate impact based on race and national origin. The EEOC Chicago District Director Julianne Bowman put it bluntly:

Because of the racial disparities in the American criminal justice system, use of criminal background checks often has a disparate impact on African Americans. This consent decree reminds employers that criminal background checks must have some demonstrable business necessity and connection to the job at issue.

Therefore, from the inception of a policy that excludes applicants with a criminal record, there exists the potential for disparate impact discrimination.

In Nevada, private employers are generally allowed to use criminal convictions and non-conviction records (for example records of arrests or charges) in their hiring decisions. While the Nevada Legislature has prohibited an employer from relying on records for non-convictions that are seven years and older, that prohibition does not extend to convictions. See NRS 598C.150. Nevertheless, private employers should be cautious in implementing policies that would exclude applicants based on criminal history.

In implementing such polices, an employer must be prepared to “demonstrate that the challenged practice is job related for the position in question and consistent with business necessity.” This standard has been discussed in several cases involving alleged discriminatory employment practices, including Griggs v. Duke Power Company, 401 U.S. 424, 431, 91 S. Ct. 849, 853 (1971). The policy is Griggs required, as a condition of employment, that the applicant have either a high school education or have successfully completed a standardized general intelligence test. Id. Such a requirement effectively disqualified African American applicants at a higher rate the white applicants. Id. The US Supreme Court concluded that the employer had failed to show that the policy had “a demonstrable relationship to successful performance of the jobs for which it was used” as the “employees who have not completed high school or taken the tests have continued to perform satisfactorily and make progress in departments for which the high school and test criteria are now used.” Id. at 431-32.

In Dothard v. Rawlinson, an applicant was refused employment at a correctional facility based primarily on her inability to meet a weight and height requirement. 433 U.S. 321, 323, 97 S. Ct. 2720, 2724 (1977). The Supreme Court concluded that the Alabama statue that set the weight and height requirement for “correctional counselors” was permissible based on the fact that their “primary duty within these institutions is to maintain security and control of the inmates by continually supervising and observing their activities.” Id. In upholding the weight and height requirement, the Court further held that “a discriminatory employment practice must be shown to be necessary to safe and efficient job performance to survive a Title VII challenge.” 433 U.S. 321, 331 n.14, 97 S. Ct. 2720, 2728 (1977).

These cases are an example of how one policy that disproportionately screens out one group of people over another is upheld and one was not. Accordingly, in implementing a policy that excludes applicants based on criminal history, private employers should be extremely cautious and ensure that their policy is based purely on a business necessity and is connected to the performance of that position. If you have any questions regarding your current polices, the Nevada Association of Employers would be happy to assist.