By Todd Higey, ESS General Counsel & Katie Robinson, ESS Corporate Counsel
The U.S. Equal Employment Opportunity Commission (EEOC) announced on September 24, 2018, that the agency finalized a voluntary settlement agreement with the well-known furniture company, Rooms To Go. This agreement is the result of allegations of racial discrimination against the company, which were raised after a black applicant’s offer of employment was rescinded in accordance with the company’s pre-employment background screening policy.
In the settlement, Rooms To Go promised to revise its policies and practices to better align with the EEOC’s interpretation of Title VII of the Civil Rights Act of 1964 (Title VII). Pursuant to the agreement, the company’s pre-employment screening policy will be updated to:
- remove blanket exclusions of applicants with criminal convictions;
- afford all applicants an opportunity for individualized assessment;
- post-pone any inquiry into the applicant’s criminal history until later in the hiring process; and
- provide certain employees with training on the updated policy as well training aimed to address implicit biases.
This settlement reflects the continuing insistence of the EEOC that Title VII regulates when and how employers can use criminal convictions as a basis for disqualifying individuals from employment. The EEOC’s contention is premised on the assumption that disqualifying individuals from employment based upon criminal conviction history has a disparate impact on men, and African-American and Hispanic men in particular. The EEOC has yet to prove this theory in a court of law. In any event, each employer’s applicant pool demographics will vary, so it cannot be assumed that all criminal conviction disqualification policies will necessarily have a disparate impact. In the absence of a disparate impact, a criminal conviction disqualification policy does not, as a matter of law, violate Title VII, as ex-offenders are not a protected class under the statute.
Even if an otherwise neutral disqualification policy has a disparate impact, an employer can still utilize that policy if it is job-related and supported by business necessity. The Rooms To Go settlement serves to caution employers that, if their “blanket exclusion” policy has a disparate impact, they will need to demonstrate business necessity and job-relatedness. For example, this can be done by reference to recidivism statistics, which show the likelihood of re-offense by crime type, as well the time period that must elapse before the likelihood of re-offense diminishes to the level of the never-arrested. We speculate that Rooms To Go did not take this approach, as doing so may have produced an outcome more favorable to the company’s existing policies.
“Furniture Retailer Rooms to Go Adopts Revised Criminal Background Check Procedures in Cooperation with the EEOC” at https://www1.eeoc.gov/eeoc/newsroom/release/9-24-18.cfm.
“Background Checks – What Employers Need to Know” at https://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm.
This publication is provided only for educational purposes; it should not be relied upon as legal advice, and it should not be used, in whole or in part, as a basis for establishing employment practices or policies, nor should it be used for resolving disputes or managing risk. Every reader’s circumstances are unique and legal advice should be obtained only from a lawyer with whom the reader has established an attorney-client relationship. Copyright 2018 ©Employment Screening Services, Inc. All material contained within this publication is protected by copyright law and may not be reproduced without the express written consent of ESS.