SHEEHAN & SHEEHAN, P.A.
Attorneys at Law | Est. 1954
The Use of Background Checks in
Hiring Decisions
By: Kim A. Griffith
Autumn 2012
Employment Law Breakfast
September 26, 2012
Disclaimer
The authors, publishers, speakers, and sponsors of this program present these materials with the
understanding that the information provided is not legal advice. Due to the rapidly changing
nature of the law, information contained in these publications or presented by the speakers may
become outdated. As a result, an attorney or other individual using these materials must always
research original sources of authority and update this information to ensure accuracy when
dealing with a specific client’s legal matters. Further, the presentation or materials provided are
not intended to establish practice standards or standards of care applicable to an attorney’s
performance. In no event will the authors, the sponsors, the speakers, or the publishers be liable
for any direct, indirect, or consequential damages resulting from the use of these materials.
The Use of Background Checks in Hiring Decisions
By: Kim A. Griffith
I.
Introduction
In order to minimize the risk of negligent hiring claims and assess the overall
trustworthiness and qualifications of job applicants, employers should at a minimum thoroughly
check a job applicant’s references prior to making an offer of employment. More extensive
background checks are prudent (and in some cases required by law) where the position in
question requires significant contact with the public, responsibility for the security or safety of
third parties, handling money or sensitive information (including electronic data, health
information, etc.), or driving in order to perform essential job functions. However, for the
reasons discussed below, care must be taken in conducting background checks and using them to
make hiring decisions.
The use of background checks in the hiring process is a current hot topic in the
employment law area as the result of an updated “Enforcement Guidance” document issued by
the U.S. Equal Employment Opportunity Commission (“EEOC”) on April 25, 2012 -- entitled
“Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of
the Civil Rights Act of 1964.” The document it is not binding on employers; however, because
an employer’s use of an individual’s criminal history in making employment decisions may, in
some instances, violate Title VII’s prohibition against employment discrimination, it is prudent
for employers to be aware of the EEOC’s views on the subject.
In addition, other laws, such as the federal Fair Credit Reporting Act (“FCRA”), limit
when and how an employer can obtain background information on job applicants. And, to avoid
potential liability for negligent hiring, a job applicant’s motor vehicle driving history is an
essential component of a background check when the position to be filled will require the
employee to drive in order to perform essential job functions.
II.
Criminal Records

The EEOC Guidance document focuses on Title VII employment discrimination
based on race and national origin, in light of employers’ increased access to
criminal history information and use of that information to screen job applicants.

National data reflects that there has been a significant increase in the number of
Americans who have had contact with the criminal justice system, which has
resulted in a major increase in the number of people with criminal records in the
working-age population.

Arrest and incarceration rates are particularly high for African American and
Hispanic men, who are arrested at a rate 2 to 3 times their proportion of the
general population.

In light of those statistics, the EEOC is concerned that employers’ use of criminal
history in screening applicants may give rise to disparate treatment of individual
applicants or have a disparate impact on certain racial and ethnic groups, in
particular African Americans and Hispanics.

Disparate Treatment. A violation of Title VII may occur when an employer
treats criminal history information differently for different candidates, based on
their national origin:
 The EEOC Guidance document uses the example of an employer that
rejects an African American applicant based on his criminal record, but
hires a similarly-situated White applicant with a comparable criminal
record:
 Both applicants have similar educational backgrounds, skills and
work experience.
 Each pled guilty to charges of possessing and distributing
marijuana as high school students.
 Neither has had any subsequent contact with the criminal justice
system.
 After college they apply for the same job. Based on the outcome
of background checks, the White candidate is referred for a followup interview while the African American is not.
 A company representative takes the position, with respect to the
African American candidate, that the company can’t afford to refer
“these drug dealer types” to client companies.
 Title VII prohibits not only employment decisions driven by racial or
ethnic animosity, but also decisions infected by stereotyped thinking about
criminality – rather than an applicant’s qualifications and suitability for
the position.

Disparate Impact. A violation of Title VII exists where an employer’s criminal
record screening policy or practice disproportionately screens out a Title-VII
protected group – such as African Americans or Hispanics – and the employer is
not able to demonstrate that the policy or practice is (1) job related for the
position in question, and (2) consistent with business necessity.
 Courts have held that it is discriminatory under Title VII to follow a
blanket policy of disqualifying any job applicant with a conviction for any
crime other than a minor traffic offense, because such a policy has a
disparate impact on groups such as African Americans and Hispanics.

Arrest Records. An arrest record standing alone may not be used to deny an
employment opportunity, because the fact of an arrest does NOT establish that
criminal conduct has occurred.
 According to the EEOC’s Guidance, a significant number of state and
federal court criminal record databases include incomplete criminal
records, for example, they may not be up-to-date in recording the final
dispositions for significant numbers of arrests.
 Third-party background screening businesses that sell criminal history
information to employers rely on those incomplete court databases, and
thus the reports they provide to employers can be inaccurate and
misleading.

Conviction Records. A record of a conviction will usually serve as sufficient
evidence that a person engaged in particular conduct, given the procedural
safeguards associated with trials and guilty pleas. However, out-of-date databases
and records may continue to report a conviction that was later expunged, or to
report as a felony an offense that was subsequently downgraded to a
misdemeanor.
 As a best practice, the EEOC recommends that employers not ask about
convictions on job applications and that, if they make such inquiries, the
inquiries should be limited to convictions for which exclusion would be
job related for the position in question and consistent with business
necessity.

The EEOC emphasizes the utility of individual assessments by employers when
presented with criminal background information on a job applicant.
 Individualized assessment generally means informing the applicant that he
may be excluded from consideration because of past criminal conduct, and
giving him the opportunity to provide additional information and context
for his past conduct. Such information might include:
 The specific facts and circumstances surrounding the offense or
conduct.
 Any inaccurate information in the criminal record.
 Evidence that the individual has performed the same type of work
for which he is applying, post-conviction, with no further incidents
of criminal conduct.
 The length and consistency of employment history before and after
the offense or conduct.
 Rehabilitation efforts, for example, education/training.
 Employment or character references regarding the individual’s
fitness for the particular position.

Employer Best Practices. The EEOC Guidance document provides the following
examples of best practices for employers when considering criminal record
information in making employment decisions:
 Eliminate policies and procedures that exclude people from employment
based on any criminal record.
 Train managers, hiring officials and decision makers 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 jobs are performed.
 Determine specific criminal offenses that may demonstrate
unfitness for performing such jobs.
 Determine the duration of exclusions for criminal conduct based
on all available evidence.
 Include an individualized assessment requirement.
 Record the justification for the policy and procedures, and keep a
record of consultations and research considered in crafting the
policy and procedures.
 Train managers, hiring officials, and decision makers 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 and use it only for the purpose for which it was intended.

The Bottom Line: Employers need to be able to show that their policy or
procedure with respect to criminal background checks operates to effectively
link specific criminal conduct, and its dangers, with the risks inherent in the
duties of a particular position.

Arrest and Conviction Inquiries by N.M. Governmental Employers. New
Mexico law does not prohibit a private employer from asking job applicants about
their arrest or conviction record. By contrast, in 2010 New Mexico became a
“ban the box” state for purposes of employment with the state or any of its
political subdivisions. While a governmental agency may take into consideration
a criminal conviction, such a conviction cannot operate as an automatic bar to
obtaining public employment. Neither state agencies and departments nor any
political subdivision of the state can inquire about a conviction on an initial
application for employment. A conviction may only be taken into consideration
after the applicant has been selected as a finalist for a position.
III.
Credit Records
Under the federal Fair Credit Reporting Act (FCRA):

Businesses that perform background checks for employers are considered “consumer
reporting agencies” (CRAs) if they communicate any information bearing on a
consumer’s credit worthiness, credit standing, credit capacity, character, general
reputation, personal characteristics, or mode of living which is used or expected to
be used in whole or part as a factor in establishing the consumer’s eligibility for
employment purposes.

CRAs may report convictions indefinitely but may not report records of arrests that
did not result in entry of a judgment of conviction, where the arrests occurred more
than seven years ago (or until the governing statute of limitations has expired,
whichever is the longer period). Those reporting restrictions do not apply to
individuals who reasonably may be expected to earn $75,000 or more.

Before obtaining a background check from a CRA, an employer must provide the job
applicant with a “clear and conspicuous disclosure” that such a report will be
obtained, and receive the applicant’s written authorization to obtain the report. A
sample notification and authorization form accompanies this article.

Before an employer denies employment based on information in a credit report, the
employer must provide the applicant with a copy of the credit report and a written
description of the applicant’s rights under FCRA.

Because of technicalities in the statute, employers should review the requirements of
FCRA carefully before obtaining a consumer report and consult legal counsel prior to
denying employment based on the content of a consumer report.
FCRA Enforcement. On August 8, 2012, HireRight Solutions (formerly known as
USCIS Commercial Services) – which provides background reports to thousands of employers
about prospective and current employees to help companies make employment decisions –
agreed to pay the Federal Trade Commission a $2.6 million civil penalty to settle alleged
violations of FCRA. The alleged violations, which HireRight Solutions denied, included failure
to take reasonable steps to ensure that the reports’ information was current and reflected such
updates as expungement of criminal records, and failure to assure the accuracy of the
information it provided. It was the first time the FTC has charged an employment background
screening firm with violating FCRA.
IV.
Driving Records
For any position that will require the employee to drive in order to perform essential
functions of the position (whether using the employee’s own vehicle or a company vehicle), that
requirement should be specified in the duties and responsibilities of the job description. Those
obtaining interviews for the position should be asked about their driving history, and required to
sign an authorization and release form permitting the employer to obtain a copy of their motor
vehicle driving records. Any job offer should be made contingent on the results of review of
their driving records. If those records reflect any citations for driving while intoxicated (DWI) or
driving while under the influence of narcotics (DUI), the employer needs to assess the attendant
risk in hiring the individual (taking into consideration any mitigating factors).