Background Checks for Employment Fuel Race Complaints

A heated recent debate over whether the use of criminal background checks in the hiring process amounts to the discrimination against minorities has been fueled by recent lawsuits filed by the Equal Employment Opportunity Commission.  On June 11, 2013, two large employers, discount retailer Dollar General Corp. and a U.S. unit of German auto maker BMW AG, were accused by the EEOC of using improperly criminal background checks in hiring.  In complaints filed in federal courts in South Carolina and Illinois, the EEOC stated that both employers should have reviewed each applicant, but instead they generally barred potential employees based on the criminal background checks.  According to the commission, their hiring policies had the discriminating effect against African American applicants. These suits accentuate government scrutiny of widely used criminal and credit background checks for screening job applicants.  According to a 2010 survey by the Society of Human Resources Management, 92% of employers use criminal background checks for some or all openings.  Last year the EEOC issued guidelines to employers which do not prohibit the use of criminal checks, but encourage employers to consider the crime, how much time has passed since the conviction and the crime’s relation to a job opening at question.  These guidelines suggest that employers review each case individually and permit applicants to explain why they should be hired even if they had been convicted.

The civil-rights laws do not protect people convicted of crimes, but the EEOC has sued employers in cases where it has concluded that information regarding prior convictions has been used for racial or ethnic discrimination.  As a result, the use of background screenings is becoming regulated by increasing number of cities and states.  Employers who do not want people with violent histories to be in contact with their customers or people convicted of financial crimes handling money, are finding it difficult to comply with the EEOC’s guidelines.

In the BMW and Dollar General cases, the EEOC cited statistical differences in the hiring rates of African Americans and non African Americans after the companies ran criminal background checks. The EEOC characterized both cases as very serious systematic race discrimination cases.

The commission alleges that BMW hired a new contractor at its assembly plant in Spartanburg, SC in 2008 and required a new criminal background check for 645 employees of the prior contractor.  55% of these employees were African American, but out of 88 terminated employees 80% were African American.  Some of these dismissed employees had worked at the BMW plant for over 14 years.  BMW of North America stated that the company believes it has compiled with the law; that BMW has a strong culture of nondiscrimination which is shown by the company’s highly diverse workforce; and that it will defend itself against the commission’s allegations.

Regarding the Dollar General case, the EEOC claims that between January 2004 and April 2007 the company revoked conditional employment offers for 10% of its African American applicants and only for 7% of its non African American applicants.  Since over 344,000 applicants were involved, the commission stated that the numbers created an improper gross disparity.  The EEOC says in the suit that Dollar General uses a formula in hiring process that includes the crime and the time passed since crimes were committed, but that the policy is illegal since it is not sufficiently job-related and does not consider individual circumstances.  Dollar General has countered with the statement that its criminal background checks are created to encourage safe environment for its customers and employees, and to protect company’s assets in a nondiscriminatory manner.

The past efforts of the EEOC to regulate criminal checks have had mixed success.  In one case in 2011, the judge ordered the commission to pay PeopleMark, Inc., a Memphis-based staffing company, $750,000 in legal fees for pursuing a case when the EEOC should have known there was no discrimination.  In another case, Freedman Cos., a Maryland convention-services company, was allowed by the judge to question the commission’s own use of criminal background checks for hiring.

Based on EEOC’s lawsuits against BMW and Dollar General, employers must rethink the circumstances and manner in which they use criminal background checks in the hiring process.  Employers may no longer follow a blanket policy of rejecting all job applicants with criminal records.  Rather, to comply with the EEOC’s policy, each case must be reviewed on an individual basis, and before rejecting an applicant the employer must be able to demonstrate that the job they applied for required an employee without a particular type of background.

For more information on this subject contact Joe Messer at, or you may call Joe at (312) 334-3440.