Archive for the Employment-Related Background Checks Category

FINRA Investment Firms and Broker-Dealers Face Significant New Background Check Requirements

FINRA Investment Firms and Broker-Dealers Face Significant New Background Check Requirements

finrasecsmallA rule recently approved by the Securities and Exchange Commission will require much more involved background checks on FINRA-registered representatives (investment broker-dealers). In addition to criminal background checks and verification of previous employment and licensure, the new rule requires searches for civil litigation, bankruptcies, liens and judgments, corporations and sole-proprietorships, and state and federal regulatory histories.

This requirement will apply to both captive (employee) registrants and independent contractors who hang out their own shingle but are registered under a brokerage house.

Imperative has been doing this sort of due diligence for private equity clients for fifteen years and it looks like we’ll be doing a lot more of it in the future!

Recently, the SEC approved FINRA’s proposed new Rule 3110(e) relating to background investigations of registered persons.  FINRA Rule 3110(e), which replaces NASD Rule 3010(e) and goes into effect on July 1, 2015, streamlines and clarifies the rule language by providing that “each member shall ascertain by investigation the good character, business reputation, qualifications and experience of an applicant before the member applies to register that applicant with FINRA and before making a representation to that effect on the application for registration.”  The rule further clarifies that a firm is required to review a copy of an applicant’s most recent Form U5, if available.  Most importantly, the rule requires that firms adopt “written procedures that are reasonably designed to verify the accuracy and completeness of the information contained in an applicant’s Form U4 no later than 30 calendar days after the form is filed with FINRA.”

FINRA’s New Background Investigation Rule Will Likely Increase Firms’ Costs and Potentially Increases Exposure for Firms in Customer Disputes | The National Law Review.



Blood in the Water: 5 Steps to Avoiding Background Check Litigation

Blood in the Water: 5 Steps to Avoiding Background Check Litigation


Many class action lawsuits were filed against employers last year claiming violations of the Fair Credit Reporting Act (FCRA) related to their use of employment background checks. This continues a several-year trend of class action lawsuits that have resulted in payouts to applicants and employees, including those who suffered no harm from the defendant-employers’ actions.

Many of these class action cases have ended in million-dollar settlements.1. Many other cases against employers settled privately before the plaintiffs’ classes were established2.

As plaintiffs’ attorneys smell blood in the water, it is important for employers to review the processes surrounding their use of background checks.

From an employer’s standpoint, FCRA compliance is fairly simple. Following are five things employers can do to avoid FCRA claims:
  1. Work with a quality background screening company. In many of these cases, the plaintiff applicant lost a job opportunity due to inaccurate information in their background check. Had those background checks been initially correct, the individual may never have had cause to even speak to an attorney. Additionally, many more millions of dollars have been paid out by background screening companies for their own failures to follow the FCRA’s requirements.
  2. Review the consumer report disclosure form. The FCRA requires that employers notify applicants or employees that a consumer report (background check) will be ordered prior to doing so. The law requires that this disclosure be made “in a document that consists solely of the disclosure.” In other words, this disclosure cannot be included as a part of the employment application. Also, a number of employers settled claims that their disclosure documents included releases of liability or other waivers, which is a clear violation of the requirement that the document consist “solely of the disclosure.”
  3. Make sure that hiring decision-makers understand their responsibilities when they receive a background check that may affect the employment decision. The FCRA requires that an individual be provided a copy of the background check and a document outlining their rights under the FCRA. In some of the class-action lawsuits, some of the employers were alleged to have skipped this step altogether while others provided the required information after taking an adverse employment action.
  4. Take a breath before taking adverse action. The intent of the FCRA’s pre-adverse action requirement is to give individuals an opportunity to review their background check for accuracy and notify the employer in the event the report includes incorrect information. Many of the FCRA lawsuits claim that the employer took the adverse action before the individual had an opportunity to review the information.
  5. Remind hiring-decision makers that the FCRA requires them to provide additional information to the individual after taking an adverse employment action. This includes informing the individual that the adverse action is being taken based in whole or part on the background check and how to contact the background screening company to dispute any incorrect information.
The FCRA’s requirements for employers are too detailed to cover in a short post. However, I recorded a webinar last year that covers the details of the FCRA’s requirements for employers. Alternatively, feel free to contact me if you have any questions about your processes.

1Notable recent case filings include:
  • Peikoff v. Paramount Pictures Corporation, 3:15-cv-00068 (Northern District of California)
  • Graham v. Michaels Stores Inc., 2:14-cv-07563 (District of New Jersey)
  • Colin Speer v. Whole Foods Market Group, Inc., 8:14-cv-03035 (Middle District of Florida)
  • Gezahegne v. Whole Foods Market California Inc. (yep, twice in one year), 4:14-cv-00592 (Northern District of California)
  • Mohamed v. Uber Technologies Inc et al., 3:14-cv-05200, (Northern District of California)

back to top

2Recent class action settlements have included:
  • $6.8 million: Knights v. Publix Super Markets Inc., 3:14-cv-00720 (Middle District of Tennessee)
  • $5.9 million: Hunter, et al. v. First Transit, Inc. and Joshaway, et al. v. First Student, Inc., 09-CV-6178 & 10-CV-7002 (Northern District of Illinois)
  • $4.08 million: Marcum v. Dolgencorp Inc. (Dollar General), 3:12-cv-00108, (Eastern District of Virginia)
  • $3 million: Pitt v. K-Mart Corp., 11-cv-00697 (Eastern District of Virginia)
  • $2.75 million: Bell v. U.S. Xpress, Inc., 1:11-cv-00181-CLC-WBC (Eastern District of Tennessee)
  • $2.5 million: Singleton v. Domino’s Pizza LLC, 8:11-cv-01823-DKC (District of Maryland)

back to top

“Will Discuss”

“Will Discuss”

willdiscuss narrowOn a daily basis, former criminal offenders are given bad advice that is costing them job opportunities. That advice goes something like this:

When you get to the criminal history question on the employment application, answer it with “will discuss.” Or, just skip it – many employers won’t even notice.

While that sounds like a clever way to artfully dodge the question, it isn’t.

Here’s what these well-meaning employment coaches and friends (most of whom have never been an employer) don’t get: Answering “will discuss” to a legally posed question on the employment application (or other document later in the hiring process), will likely result in the applicant’s elimination from consideration.

Will discuss? Oh, no we won’t.

Look, I’m an HR guy consulting with HR professionals and business owners every day who also owns a background investigations firm. I have also counseled countless former offenders on looking for meaningful work with a criminal history. I’ve seen this scenario play out from all angles.

First of all, like it or not, the employer gets to set the terms of engagement. Job applicants don’t get to rewrite the employment application or change the application process. Employers have neither the time nor desire to negotiate process with each applicant. If an applicant demonstrates resistance to the employer’s process, the employer’s response will often be to simply move to the next candidate.

If there is one thing most employers don’t need, it is another noncompliant employee.

Also, it is human nature to assume the worst (murder, sex offenses, etc.) when an applicant is evasive. Employers don’t normally see “will discuss” and think, “Oh, he must have been caught jaywalking.” Someone with a relatively minor or older criminal history is actually hurting their chances at getting the job by taking this approach.

The advice I always give job seekers is to answer the question that is posed. If the employer only asks about felonies in the last seven years (a limitation I don’t recommend), the applicant shouldn’t volunteer the misdemeanor offense or the ten-year old felony on the application.

In the response, the job seeker should provide as much detail as possible. I recommend confirming the jurisdiction, dates, exact offense description, and sentencing details in advance. Simply calling the court will often get that info. By providing a straightforward and complete answer, the applicant will seem much more credible than if they skip the question or provide a non-answer like “will discuss.”

If the employer’s question didn’t cover the applicant’s offense situation and they could honestly answer “no” to the inquiry, I recommend that the applicant proactively disclose their criminal record.

At the end of the interview, the applicant might say something along these lines:

I appreciate your time today. I think this would be a great place to work and I’m sure that I will bring value as an employee. Although you haven’t asked about it, there is one thing I’d like to discuss with you so that there are no misunderstandings later…

The applicant can then briefly explain the offense and circumstances without making any excuses or laying blame on anyone else. Then, and this is the most important part, they should explain what they learned from that circumstance and what they have done in the intervening time to demonstrate that the prior bad behavior is not reflective of who they are today.

Why do this? First, the applicant has nothing to lose. If the employer does a background check, it is likely that the information will come out anyway. Why wouldn’t a job seeker prefer to initiate and participate in the conversation rather than have it revealed by a background check and examined outside of their presence?

Additionally, employers hate surprises. Even if they haven’t asked, they want need to know and it is HR’s job – not the job seeker’s – to determine whether the information is relevant. If the applicant doesn’t bring it up and the background check reveals a criminal history – even one that isn’t directly related to the job – the employer is going to question the applicant’s integrity. “If this person becomes an employee, am I going to have to play 20 questions to make sure I know everything I need to know?”

I should add that this approach should also be taken by applicants with potentially negative employment references.

I recognize that there are state-law issues, possible Title VII considerations, and other concerns an employer may have. Most of those are covered in our recorded webinars. I also recognize that there are some knucklehead hiring managers who will completely disregard anyone with any criminal history – though they are rarer than Ban the Box proponents seem to believe.

So, what do you think? Let me know below!

Background Investigations Expert Mike Coffey to Present Valuable Educational Sessions in South Texas on January 14, 15, and 16 in Three Separate Cities

When given the opportunity, Mike Coffey, SPHR, will seize the opportunity to educate employers about the need for pre-employment background checks. Coffey, owner of Imperative Information Group – a background investigations firm in Fort Worth, Texas serving small and medium-sized employers, is an engaging speaker. He has developed a number of presentations related to sourcing, selection, and management of employees. He routinely delivers these to SHRM chapters, chambers of commerce, and other business groups. He will start the new year with three presentations in South Texas.

Mike Coffey’s presentation schedule:

January 14, 2015 – How to Ensure Your HR Department is Outsourced: This tongue-in-cheek approach to the HR professional’s strategic role inside of organizations highlights the many ways outside of the HR box that they can add value to the organization.

Time: 11:30am – 1:00pm

Location: Lower Valley Chapter SHRM  – Gladys Porter Zoo, 500 East Ringgold Street, Brownsville, TX 78520

January 15, 2015 – Creating a Criminal History Evaluation Tool: In order to effectively and consistently evaluate the criminal histories of prospective and current employees, it is important that employers consider which criminal offenses are relevant to specific jobs.  Additionally, the age and frequency of offenses should also be considered when evaluating relevancy.  In this presentation, we will walk through the process of developing a criminal history relevance matrix, an effective tool for documenting employers’ policies with regard to the impact of individuals’ criminal histories on their employment eligibility.

Time: 8:00am – 5:00pm

Location: Texas Business Conference | Isla Grande Beach Resort on South Padre Island, 500 Padre Boulevard, South Padre Island, TX 78597

January 16, 2015 – The Business Case for Running Background Checks: In this presentation, Coffey discusses that most employers recognize the need to conduct a background check on the prospective or even current employees but many are confused by the myriad of products available to them and their legal compliance requirements. With increased focus on background check issues from the EEOC, courts, state and local legislators, and plaintiffs’ attorneys, HR professionals need to understand what information to request from their background screening partner and how to use it legally. Coffey will cover a handful of topics related to employment background investigations including:

  1. The business case for running background checks
  2.  The efficacy of different background check components
  3.  Employers’ responsibilities under the Fair Credit Reporting Act

Coffey’s presentation will be one of 30 concurrent educational sessions presented by experienced speakers who are industry leaders, attorneys, and HR professionals covering a wide variety of HR topics.

Time: 3:00pm – 4:15pm

Location:   The Annual South Texas Human Resources Symposium | Henry B. Gonzalez Convention Center, 200 East Market Street, San Antonio, TX 78205

About Imperative Information Group:

In 1999, Mike Coffey founded the firm that became Imperative Information Group in Fort Worth, Texas. Hundreds of companies call on Imperative Information Group to research the backgrounds of prospective and current employees. Imperative is also an HRCI Approved Provider, which means that certified HR professionals can earn recertification credit for programs that meet HRCI’s requirements. Mike normally delivers several free webinars for HRCI recertification credit each month. To learn more about Imperative Information Group, please visit or contact Mike Coffey or Andrew Parsons at 877-473-2287.

HR Expert Offers Advice to Employers on Responding to Ban the Box and Other Limitations on Criminal History Consideration

Checkbox IconMunicipalities, states, and federal regulators have created an inconsistent and confusing patchwork of regulations limiting employers’ inquiry into job applicants’ criminal histories. Mike Coffey, SPHR, President of Imperative Information Group, will discuss these limitations and possible employer responses in a free HRCI-credit approved webinar, Outside the Box: Developing a Legally Compliant and Effective Criminal History Inquiry, on June 5th.

Some efforts to assist former criminal offenders in finding meaningful employment pose significant challenges to employers responsible for providing safe and productive workplaces, says human resources expert Mike Coffey, SPHR. He will be conducting a free webinar for employers on June 5, 2014 entitled “Outside of the Box: Developing a Legally Compliant and Effective Criminal History Inquiry.”

Coffey, president of HR consulting and background screening firm Imperative Information Group, says that while well-meaning, many of these initiatives waste the time of both applicants and employers. Others limit employers’ abilities to make well-informed hiring decisions as to create dangerous work environments.

In April 2012, the Equal Employment Opportunity Commission published a guidance document recommending that employers “ban the box”, which typically means removing the criminal history question from employment applications and delaying such inquiries until after applicants have been granted an interview. According to the National Employment Law Project, the ban the box campaign has been written into the statutes of twelve states and the local ordinances of at least sixty-four municipalities. Baltimore, Maryland joined this group on Thursday, May 29 when Mayor Stephanie Rawlings-Blake signed Baltimore’s ban the box legislation.

“Ban the box laws make it harder for companies to provide safe and productive workplaces,” says Coffey.

“Ban the Box assumes that employers are automatically denying former offenders job opportunities, regardless of the nature of their past offenses, the risks associated with the job, or the applicant’s conduct since the offense, which simply isn’t true,” says Coffey. “Most employers have a nuanced approach to reviewing applicants’ criminal history to determine whether their past behavior suggests a future risk in the workplace.”

Coffey says that delaying the criminal history inquiry until after the interview only wastes the time of everyone involved. “Employers waste time and money scheduling and conducting interviews with applicants, only to find out that an individual’s criminal history eliminates him from consideration for the position. Likewise, applicants often have to arrange child care, arrange for time away from their current job, and find transportation, only to learn at the end of the interview that their past bad behavior legitimately eliminates them from consideration.”

Most employers’ hiring practices consider individuals with a wide variety of past criminal behavior as eligible for employment. In fact, employers are more likely to use criminal history information, along with the rest of the applicants’ background information, to compare or rank applicants against one another. “Assuming that skills and education are similar, it makes sense that an applicant who has been consistently employed and has had no criminal history in the last ten years would be preferable over someone who has been unavailable for work because of incarceration or has had a series of even minor criminal infractions over the same time period.”

During the June 5, 2014 webinar, “Outside of the Box: Developing a Legally Compliant and Effective Criminal History Inquiry,” Coffey will discuss the various municipal and state approaches to banning the box and other ways they are limiting employers’ ability to consider criminal history. He will also provide information to employers about how to inquire about criminal history information without running afoul of the myriad of laws governing the issue.

The webinar is approved for one hour of general recertification credit for certified human resources professionals through the HR Certification Institute. Interested employers can register for the webinar at This is the last in a series of six webinars covering employers’ selection and screening practices. Recordings of the previous webinars are also available on the website.


Join Mike Coffey, SPHR at Panhandle HRA on June 3rd

Human resources consultant and background screening expert Mike Coffey, SPHR, president of Imperative Information Group, will address the Panhandle Human Resource Management Association’s monthly luncheon in Amarillo, Texas on June 3, 2014. His presentation, Background Screening Policy Considerations to Avoid Discrimination Claims, will address ways employers can avoid discrimination claims while considering job applicants’ criminal history information.

On April 25th, 2012, the Equal Employment Opportunity Commission issued new “enforcement guidance on the consideration of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act of 1964.” This was the first guidance on this topic issued by the EEOC in more than 20 years and reflects the EEOC’s recent scrutiny of employers’ use of criminal records in making employment decisions. In addition to Title VII, other federal and state laws regulate employers’ use of criminal records, credit reports, and other information.

The presentation will walk employers through the process of preparing a background screening policy that helps ensure a safe and productive workforce while staying out of regulators’ and plaintiffs’ attorneys’ crosshairs. In addition to covering the EEOC’s guidance, Coffey will discuss ways to implement many of the EEOC’s recommendations, including individualized assessment of individuals with criminal histories, without creating impediments to developing a safe and productive workforce. Registration for this event is available online at

“While the EEOC guidance is not a mandate that employers must follow, it makes sense to ensure that our processes are reasonable and documented in order to defend any discrimination claims or costly litigation,” Coffey says. During the presentation, Coffey will present tools that have helped employers across the country develop and document policies regarding the use of criminal history information in making hiring decisions.

The Panhandle Human Resources Association (PHRA) is an affiliate of the Society for Human Resource Management (SHRM). PHRA was formed to educate, train and provide a forum for communication for professionals in the human resource field. PHRA provides a medium for exchange of information on subjects of mutual concern and actively works to improve the competence of human resource professionals through programs and projects.

Mike Coffey is an HR professional and president of Imperative Information Group, a background investigations firm based in Fort Worth, Texas. He is also certified as a Senior Professional in Human Resources (SPHR) by the HR Certification Institute. Coffey is a regional director for Texas SHRM and a board member for the Texas Association of Business.

Off-the-Court Foul Costs Steve Masiello $5 Million Coaching Gig

Off-the-Court Foul Costs Steve Masiello $5 Million Coaching Gig

Steve Masiello is the latest AAC coach with background check issues.

Last year, I wrote about problems with the background check on Rutgers University’s athletic director, Julie Hermann.  Rutgers also got stung last year when their men’s basketball coach was outed as not having a degree he had claimed. Both employees kept their jobs despite significant issues in their background.

Another college coach was not so fortunate this week.

The University of South Florida this week withdrew its basketball coaching offer from Steve Masiello after determining that his claim of a degree from the University of Kentucky could not be verified. His current employer, Manhattan College, said in a statement:

As a result of a background check commissioned by the University of South Florida, Manhattan College has learned there is a question of the validity of head men’s basketball coach, Steve Masiello’s undergraduate degree from the University of Kentucky.

Masiello is currently in the process of reviewing his degree status with the University of Kentucky. Manhattan College has placed Masiello on leave while he completes this process with the University.

Why would USF withdraw its 5-year, $5 million offer to Masiello, who this year led Manhattan College to the NCAA Tournament for the first time in a decade? Does that degree in Communications he falsely claimed to have really matter for a coaching position? Obviously not – he had a winning record without it.

The simple fact is that integrity matters.

Beyond setting forth the applicant’s qualifications for the position, the resume or the employment application is the least expensive integrity test an employer will ever give an applicant. If an applicant is willing to lie to get a job, might he lie to advance in the job? Can he be trusted to do the right thing at times when it is more convenient to cut corners or avoid difficult truths?

Some believe that the withdrawing Masiello’s offer is too harsh. Certainly, I agree that it shouldn’t be an eternal blackball preventing him from ever obtaining a coaching job. However, he will likely have to earn again the trust of administrators at Manhattan or elsewhere before advancing his coaching career.

Gregg Doyel, a nationally syndicated sports columnist, writes on

The punishment is too harsh, but sometimes life isn’t fair. Look, Masiello wasn’t fair in 2000 when he got a job out of college as an entry-level staffer at Tulane under Shawn Finney, who surely wouldn’t have hired Masiello — wouldn’t have been able to hire him — had he known Masiello didn’t have a degree. Which means Masiello got a position that should have gone to someone else. Who was that someone else? We don’t know. We’ll never know, because Finney never had to go down the list. He hired Masiello, and whoever would’ve been next simply didn’t get the call. Maybe that guy, whoever he is, got a job the next day at another school. Maybe that guy didn’t get a job the next day, or the next, and now is selling cars in Yuma.

Some things, you just can’t know.

But this thing, you can. This thing, you simply have to know if you’re a teenager or a young adult. It’s the lesson you have to learn from Steve Masiello, and from disgraced Notre Dame almost-coach George O’Leary, and from anyone else who has lost a job because of a discrepancy on their resume:

You can’t tell a lie there. Not on your resume. Not if you want any peace of mind for, say, the rest of your life.

Good advice for every job seeker.

How We Got Here: The State of Texas vs. The Equal Employment Opportunity Commission

How We Got Here: The State of Texas vs. The Equal Employment Opportunity Commission

Texas vs EEOC

In April 2012, the Equal Employment Opportunity Commission issued a new policy guidance on the use of criminal records by employers. The purported intent of the document was to lay out the EEOC’s policy for identifying when an employer’s process and criteria for reviewing applicants’ or employees’ criminal history information will be viewed as discriminatory. According to the guidance:

The Commission intends this document for use by employers considering the use of criminal records in their selection and retention processes; by individuals who suspect that they have been denied jobs or promotions, or have been discharged because of their criminal records; and by EEOC staff who are investigating discrimination charges involving the use of criminal records in employment decisions.

The guidance went beyond previous EEOC guidance and court decisions on this topic, adding new expectations for employers’ review of criminal records. The most notable change was the addition of an expectation that employers give applicants with disqualifying criminal history information an opportunity to “demonstrate that the exclusion does not properly apply to him.” In this situation, the employer would be expected to review information provided by the applicant, including whether he completed rehabilitation programs, “the facts or circumstances surrounding the offense,” and employment and character references.

The guidance also suggested that employers remove the criminal history inquiry from the employment application and delay such inquiry until after the employer has interviewed the applicant.

For many, the most controversial position staked out in the EEOC’s guidance was that an employer who was prohibited by state law from hiring individuals with certain kinds of past offense for particular positions could be sued in federal court by the EEOC for disparate impact. In fact, the Cincinnati, Ohio school district is currently defending a discrimination class action by the EEOC for following Ohio state law, which prohibits the district from hiring certain kinds of former offenders. A federal court refused to dismiss the EEOC’s discrimination case, stating the federal law trumps state law.

The EEOC is not a regulatory agency, meaning that it cannot publish regulations by which employers must abide. Rather, it is a law enforcement agency charged with bringing employers who are believed to have violated Title VII of the Civil Rights Act of 1964 or any of the other employment-related laws the Commission is charged with enforcing.

Therefore, the EEOC’s guidance documents are not “the law of the land.” They are merely the Commission’s view of what constitutes discrimination under the law. It is up to courts, not the EEOC, to determine whether discrimination actually took place.

On some issues, the courts have shown deference to the EEOC’s guidance documents but in the area of employers’ use of criminal history information, the courts have not been kind to the EEOC. Each case that has been decided went in favor of the employer, typically because the EEOC was wrong on the facts – recent cases haven’t even proceeded to the point of determining who was right on the law. In fact, no plaintiff has won a Title VII case with regard to an employer’s use of criminal records since 1975.

On July 24, 2013, in response to the EEOC’s guidance and a couple of related discrimination suits against BMW and Dollar General, the Attorneys General of West Virginia, Alabama, Colorado, Georgia, Kansas, Nebraska, South Carolina, and Utah sent a letter to the EEOC’s Chair protesting the EEOC’s “attack on criminal background checks in the hiring process.” The letter detailed the importance of employment background screening and expresses their AGs’ belief that the “policy guidance – and the recently filed lawsuits – incorrectly apply the law.” The letter continued:

We are troubled that your agency’s true purpose may not be the correct enforcement of the law, but rather the illegitimate expansion of Title VII protection to former criminals… Your real target appears to be the perceived unfairness of judging an individual – of any race – solely by his or her past criminal behavior… But no matter how unfair a bright-line criminal background check might seem to some, it is not your agency’s role to expand the protections of Title VII under the pretest of preventing racial discrimination. If Congress wishes to protect former criminals from employment discrimination, it can amend the law.

In response to the Attorneys General’s letter, EEOC Chair Jacqueline Berrien responded with her own letter on August 29, 2013.  She noted but did not deny the Attorneys General’s claim that the EEOC was trying to create a new protected class. She did state that she wanted “to make clear that it is not illegal for employers to conduct or use the results of criminal background checks, and the EEOC never has suggested that it is.” In effect, her letter restated the high points of the policy guidance without addressing the core issues of the Attorneys General’s letter.

On November 4, 2013, Texas Attorney General Greg Abbot filed suit against the EEOC and Chair Berrien, seeking ‘declaratory and injunctive relief against the Equal Employment Opportunity Commission (“EEOC”) and its recently promulgated “enforcement guidance.”’

According to the lawsuit, “The State of Texas and its constituent agencies have the sovereign right to impose categorical bans on the hiring of criminals, and the EEOC has no authority to say otherwise.” The Attorney General disputed the legal philosophy behind the guidance and the EEOC’s right to enforce the guidance against employers who are following state laws limiting individuals with certain offense histories from certain occupations.

The Texas suit asks the court to acknowledge the state’s right to prohibit certain former offenders from particular occupations, find the EEOC’s enforcement guidance unlawful, and direct the EEOC not to allow individuals to sue the State of Texas as an employer based upon the EEOC’s interpretation of Title VII.

The EEOC has subsequently responded, asking the court to dismiss the case because the State of Texas has no right to sue because it has suffered no injury from the publication of the guidance.

In December of 2012, the U.S. Commission on Civil Rights (USCCR) held a hearing with seventeen speakers to examine the EEOC’s guidance. It was not until February of this year, however, that the consequential report, “Assessing the Impact of Criminal Background Checks and the Equal Employment Opportunity Commission’s Conviction Records Policy,” was released. The opening of that report is a great primer on the history of the litigation and regulatory history surrounding employers’ use of criminal history. The
testimony of each of the seventeen speakers is included in the report, followed by divergent opinions on the use of criminal history and the EEOC’s guidance by the USCCR commissioners. Alas, consensus was not reached.

As the tumult surrounding the EEOC’s policy guidance continues and its cases against BMW and Dollar General progress in the courts, there is still much to be decided by the courts.  This leaves employers with the problem of making well-informed hiring decisions while avoiding becoming the EEOC’s next target.

On March 18th, Imperative Information Group will sponsor a free one-hour webinar entitled “Background Screening Policy Considerations to Avoid Discrimination Claims.” This webinar, which has been approved for one hour of HRCI general recertification credit, will review the history and details of the EEOC guidance and share practical ways that employers can respond to the EEOC guidance without compromising the safety or productivity of their workforce.

If you aren’t certain that your use of criminal history information in making hiring decisions is consistent and not creating a disparate impact on protected classes, register for our webinar today.

San Francisco Significantly Restricts Employers’ Use of Employment Background Check Information

San Francisco Significantly Restricts Employers’ Use of Employment Background Check Information


It may effectively be “lights out” for employers’ use of criminal history in San Francisco.

On February 17th, San Francisco became the latest municipality to place limitations on employers’ inquiries into job applicants’ criminal histories. However, The City by the Bay wasn’t satisfied with this encroachment into employers’ decision-making process and took it much farther.

Checkbox IconBanning The Box

According to the Fair Chance Ordinance, which amends the city’s Police Code, employers hiring for positions in San Francisco may no longer inquire about an applicant’s criminal history on the employment application or at any time “until either after the first live interview with the person (via telephone, videoconferencing, use of other technology, or in person) or, at the Employer’s discretion, after a conditional offer of employment.”  This is typical of the increasing number of municipal ordinances and state laws enacting “Ban the Box” legislation. (I’ve written about the problems with Ban the Box a number of times over the last five years. It is also a topic addressed in our Background Screening Policy Considerations to Avoid Discrimination Claims webinar.)

Limiting Information to be Considered

The amendments go beyond banning the criminal history inquiry from employment applications and add limitations on what information can be considered by an employer when evaluating an applicant for employment:

Regarding applicants or potential applicants for employment or employees, an Employer shall not, at any time or by any means, inquire about, require disclosure of, or if such information is received base an Adverse Action in whole or in part on:

(1) An Arrest not leading to a Conviction, excepting under circumstances identified in this Section an Unresolved Arrest;

(2) Participation in or completion of a diversion or a deferral of judgment program; 

(3) A Conviction that has been judicially dismissed, expunged, voided, invalidated, or otherwise rendered inoperative, by way of example but not limitation, under California Penal Code sections 1203.4, 1203.4a, or 1203.41;

(4) A Conviction or any other determination or adjudication in the juvenile justice system, or information regarding a matter considered in or processed through the juvenile justice system;

(5) A Conviction that is more than seven years old, the date of Conviction being the date of sentencing;

(6) Information pertaining to an offense other than a felony or misdemeanor, such as an infraction.

Accordingly, the matters identified in this subsection (a) may not be considered in any manner by the Employer.

So an employer in San Francisco cannot ask applicants about or consider any criminal history except for convictions in which the sentencing occurred in the last seven years or active pending cases. Convicted of murder or rape eight years ago and still on probation? Don’t ask, don’t tell.

The ordinance limits employers to considering only misdemeanor and felony convictions. It also allows employers to consider “unresolved arrests” which are basically arrests where a case has been filed but has not yet been completed in the court system.

Employment background screening companies providing reports to California employers already have similar limitations on reporting non-conviction information and convictions older than seven years, so most San Francisco employers will likely not notice much in the way of change from the first five items above.

Banning Most Inquiries into Driver Safety

Item 6, however, is a new, and perhaps unintended, twist. By barring employers from considering “infractions”, the new ordinance prohibits employers from considering most of the information in applicants’ driving histories. Items such as speeding tickets and other traffic violations are considered infractions under California law and therefore cannot be considered by employers under this ordinance.

In order to comply with state and federal laws, some employers must make inquiries and consider information more broad in nature than allowed by the revised ordinance. The ordinance recognizes this and includes a preemption clause that allows employers to comply with state and federal law without violating the city ordinance. This presumably would cover driving history inquiries made by employers who employ commercial motor vehicle drivers governed by California law or the federal Department of Transportation.

However, as written, the ordinance seems to prohibit many employers whose employees operate smaller, non-commercial vehicles from inquiring into drivers’ safety history. This would include outside sales representatives, pizza delivery drivers, couriers, and others who drive non-regulated vehicles in the course of their work. Also, many employers use applicants’ driving history to evaluate their safety awareness when they may be operating heavy or dangerous equipment as part of their job responsibilities. That is now illegal in San Francisco under this ordinance.

Decision-Making Criteria

The ordinance also limits how San Francisco employers are allowed to use criminal records in evaluating applicants’ fitness for positions. Employers can only consider “directly-related convictions, defined as:

“Directly-Related Conviction” in the employment context shall mean that the conduct for which a person was convicted or that is the subject of an Unresolved Arrest has a direct and specific negative bearing on that person’s ability to perform the duties or responsibilities necessarily related to the employment position. In determining whether the conviction or Unresolved Arrest is directly related to the employment position, the Employer shall consider whether the employment position offers the opportunity for the same or a similar offense to occur and whether circumstances leading to the conduct for which the person was convicted or that is the subject of an Unresolved Arrest will recur in the employment position.

This very narrow language requires that employers tie offenses directly to the position for which the individual applied. On its face, this may not seem like a practice different from what many employers have been following since the 1975 Green v. Missouri Pacific decision. However, it fails to recognize that employers often make fair judgments about candidates’ judgment and behavior patterns when reviewing criminal history items not “directly-related” to job responsibilities.

For example, an employer may not be concerned about a drunk driving offense three years ago when evaluating an applicant for a desk job that does not require them to operate a motor vehicle. On the other hand, an employer would rightly be concerned if an applicant had two DWIs and a drug possession offense in the last three years. None of those would likely meet the narrow definition of “directly-related convictions” for a desk job. However, when evaluated together they would be relevant when comparing one candidate to the next.

(In our free April 15th webinar, Creating a Criminal History Evaluation Tool, we’ll discuss how to assess both job-relatedness and when a series of criminal offenses that might be unrelated to a job might be relevant to the hiring decision.)

Special Adverse Action Provisions

The ordinance also requires that employers give each candidate an opportunity to provide “any evidence of inaccuracy [with regard to the criminal history records] or Evidence of Rehabilitation or Other Mitigating Factors.” This is reminiscent of the Equal Employment Opportunity Commission’s April 2012 guidance that suggests that applicants should be given an opportunity to explain why the employer’s policy with regard to criminal records should not apply to them. The ordinance defines

“Evidence of Rehabilitation or Other Mitigating Factors” may include but is not limited to a person’s satisfactory compliance with all terms and conditions of parole and/or probation (however inability to pay fines, fees, and restitution due to indigence shall not be considered noncompliance with terms and conditions of parole and/or probation); employer recommendations, especially concerning a person’s post-conviction employment; educational attainment or vocational or professional training since the conviction, including training received while incarcerated; completion of or active participation in rehabilitative treatment (e.g. alcohol or drug treatment; letters of recommendation from community organizations, counselors or case managers, teachers, community leaders, or parole/probation officers who have observed the person since his or her conviction; and age of the person at the time of the conviction. Examples of mitigating factors that are offered voluntarily by the person may include but are not limited to explanation of precedent coercive conditions, intimate physical or emotional abuse, or untreated substance abuse or mental illness that contributed to the conviction.

As we will discuss in our Background Screening Policy Considerations to Avoid Discrimination Claims webinar on March 18th, the state and federal prison systems have spent fortunes trying to determine what programs lead to rehabilitation and their success rate has been dismal. Now the EEOC and the City of San Francisco seem to expect employers to be able to evaluate such programs from a distance.

After providing the applicant a copy of their criminal history report (as required by the Fair Credit Reporting Act and repeated in the ordinance), the ordinance also seems to require that employers wait a minimum of seven days for the applicant to respond to the employer with evidence of rehabilitation or other mitigating factors. If that information is offered by the applicant, “the employer shall delay an Adverse Action for a reasonable period after receipt of the information and during that time shall reconsider the prospective Adverse Action in light of the information.”

Additional Notifications to Applicants

The ordinance requires employers to include new language in any job postings or other employment advertising stating “that the Employer will consider for employment qualified applicants with criminal histories.” This is a requirement even if the employer is not going to look into applicants’ criminal histories.

The City will also be publishing a notice  in “English, Spanish, Chinese, and all languages spoken by more than 5% of the San Francisco workforce” outlining the restrictions on employers and how individuals can report what they believe to be violations of the ordinance. Employers must post these conspicuously in the workplace.

Exception for Government Employers

Of course, the City exempted itself and other government entities from the requirements of this ordinance.

Employers in San Francisco should carefully review the language in The Fair Chance Ordinance with their legal counsel and their background screening partner and revise their policies accordingly.


CBS 11 News Interviews Imperative President Mike Coffey About Uber’s Background Checks

CBS 11 News Interviews Imperative President Mike Coffey About Uber’s Background Checks

As a follow up to my blog post earlier this week about how car-sharing service Uber’s flawed background screening process exposed customers to drivers with recent felony backgrounds, CBS 11 interviewed me about the issue. The full text of the story is available on the CBS11 website.

Page 1 of 812345...Last »