Criminal background check

Criminal background checks are routine for job applicants. But in 2012, the Equal Employment Opportunity Commission (EEOC) disrupted that routine when it issued guidance for how and when criminal background checks should be used by employers. But – at least in Texas – the Fifth Circuit Court of Appeals restored the status quo; It ruled the EEOC cannot enforce the guidance against Texas to disqualify applicants with criminal convictions. Here’s a link to the Fifth Circuit Court of Appeals August 6, 2019, decision (Texas v EEOC).

The EEOC’s criminal background guidance reasoned that using criminal convictions to disqualify applicants could lead to race and national origin discrimination. Accordingly, it recommended employers eliminate policies and practices that exclude people from employment solely based on any criminal record conduct. Instead, employers were told they should conduct individualized assessments of the job requirements and applicants to determine specific offenses that may demonstrate unfitness for performing the job.

Texas responded to the EEOC’s 2012 guidance by suing the federal government. It argued the EEOC exceeded its authority and that the guidelines conflicted with Texas laws barring the employment of workers with felony convictions for certain positions. Texas also argued it should be able to impose categorical bans on hiring workers with criminal backgrounds.

The Fifth Circuit Court of Appeals upheld an order blocking the EEOC from enforcing its guidance against Texas. Admittedly, this conclusion omits significant procedural twists and turns between the initial suit by Texas and the Court of Appeals decision. See the opinion for this discussion. The Fifth Circuit concluded the EEOC’s guidance was a substantive rule. As such, the EEOC was enjoined from enforcing it because federal law does not authorize the  Agency to promulgate substantive rules to implement Title VII.  So the Court modified the district court’s injunction, which prohibited the EEOC’s guidance “until [it] complied with the notice and comment requirements under the [federal Administrative Procedure Act (APA)] for promulgating an enforceable substantive rule.”

One interesting quirk to the Fifth Circuit’s ruling was the dichotomy between the interests of the Trump administration’s Justice Department and that of the EEOC it was representing. The DOJ’s brief stated: “Neither the Department of Justice, nor any other government agency is bound by the guidance … [the DOJ] disagrees with the approach and analysis of the EEOC in numerous respects … [there is] no material probability the DOJ would seek to enforce the EEOC’s guidance …” Reading between the lines, the EEOC guidance is often described in terms of being an “Obama-Era Restriction.”

What does this mean for Michigan Employers?

As we have previously noted, the EEOC’s criminal conviction guidance closely parallels legislative actions taken by state and local governments that have implemented rules prohibiting the use of criminal convictions to exclude applicants. This initiative commonly referred to as “ban the box.” In fact, Michigan, under former Gov. Snyder, an executive order prohibited state departments from initially asking job seekers if they’ve been convicted of a felony. See Michigan “Bans-the-Box” for State Job Applicants. Similar to the EEOC’s guidance, a criminal history review could still happen later in the hiring process, just not as an initial screen for State of Michigan job applicants.

However, this ban of the EEOC’s guidance is of limited present value to Michigan employers; the Fifth Circuit does not include Michigan (it is in the Sixth Circuit). Even so, the Fifth Circuit expressly declined to prohibit the EEOC from challenging criminal background checks for allegedly violating Title VII (e.g., under an adverse impact theory); it just cannot enforce Title VII using the guidance to interprete Title VII violations. Of more interest, the court’s analysis provides a roadmap for employers to challenge other EEOC “substantive” rules issued (arguably) in violation of the APA.

Use this link to contact Michigan attorney Jason Shinn if you have questions about this article, or complying with Michigan or federal employment laws or litigating claims under both. Since 2001, Mr. Shinn has represented companies and individuals in employment discrimination claims under federal and Michigan employment laws.