The Fifth Circuit has found that the Equal Employment Opportunity Commission (EEOC) does not have rule-making or enforcement authority to require that employers conduct job-relatedness assessments of their candidates’ criminal histories as part of the background check process. However, that does not mean that employers should change their criminal adjudication processes.
In 2012, the EEOC issued Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964. The intent of this guidance was to address the effect of disproportionate arrest and conviction rates on the employment of minorities through an individualized assessment conducted by an employer of a candidate’s criminal history, and its relatedness to the position sought by the candidate.
On August 6, 2019, the U.S. Court of Appeals for the Fifth Circuit held that the EEOC did not have legal authority to create or enforce substantive rules in State of Texas v. Equal Employment Opportunity Commission.
How did this come about?
In November 2013, one year after the EEOC issued its guidance, the state of Texas, as a major employer of individuals in positions concerning public safety, sued the EEOC alleging that the EEOC’s guidance on the use of criminal records by employers in hiring was unlawful. The state brought the lawsuit after a candidate who applied for a position with the Department of Public Safety was rejected and filed a complaint with the EEOC concerning the state’s “no-felons” hiring policy. Texas sued the EEOC and argued that the EEOC did not have the authority to draft and enforce substantive rules on employers, and the state could exclude felons from its employment in certain positions lawfully.
After several actions by various courts including the initial compliant being dismissed by the District Court in 2014, and remanded or returned to that same court on appeal in 2016, we arrive at the most recent decision which was filed by the Fifth Circuit Court of Appeals on August 6, 2019.
The State of Texas prevailed, with the Fifth Circuit holding that the EEOC’s Guidance was in fact a substantive rule, and that the EEOC did not have the authority to issue such a rule with its guidance. The Court further prohibited the EEOC or the Attorney General from enforcing the EEOC’s guidance against the state.
Do you need to change your hiring process to comply?
In short, no—at least not now. It’s important to frame this as the decision of one circuit court specific to issues raised by one employer, the State of Texas, which is a public employer at that. Therefore, the reach of this decision is uncertain. While the Fifth Circuit’s decision could provide an impetus for plaintiffs in other jurisdictions to bring similar suits, time will tell if other courts agree with the Fifth Circuit’s analysis.
Employers are reminded that the EEOC’s guidance concerning individualized assessments is also rooted in the criminal assessment requirements of several jurisdictions with ban the box laws (e.g. those laws that prohibit or delay an employer’s inquiry into a candidate’s criminal history). Further, several states have passed legislation which requires that an employer demonstrate a rational relationship between an individual’s criminal conduct and the role to which they are applying. This means that the EEOC’s guidance has seeped into statues that were lawfully declared and can be enforced by their relevant authorities.
Employers should not rush to change their screening processes as a result of this ruling as the EEOC has yet to issue commentary on this recent decision. Therefore, it is uncertain if they will be deterred by the Fifth Circuit’s holding or if they will proceed with enforcement of their guidance. Until employers receive direction from the EEOC or further clarity is gained through the courts employers should continue to conduct individualized assessments as practical, avoid hiring rules that automatically disqualify an individual from hire because of their criminal history, and abide by state and local rules that require a rational analysis of a candidate’s convictions as part of the hiring process.