Hiring, Background Checks and Discrimination

With a tightening labor market, employers believe “so called” background checks have garnered increasing importance, with the employer taking greater steps to ensure that the candidate for a position is a “good fit”. As well, with a dearth of jobs in the marketplace, employers are finding themselves in a position to be much more discerning and selective with the few positions they have open, and the large number of applicants for each position.

The New York Law Journal recently examined the legal implications of background check practices. On the subject of criminal background, the Equal Employment Opportunity Commission (“EEOC”) states that discrimination based solely upon an individual’s criminal record is illegal, concluding that arrests and incarcerations affect minority populations, particularly Hispanics and African Americans, and are generally prosecuted at a rate much higher than whites. However, employment may be legitimately denied to an individual if their criminal record is related to the position. For example, refusing to hire a convicted bank robber as a bank security guard.

Another potential area of concern is for employers conducting checks of candidates financial and credit histories. Federal law prohibits terminating or discriminating against an employee on the basis of their credit statuses, or previous indebtedness. However, courts have interpreted the law to not include decisions related to hiring of employees, and has been used to justify not hiring candidates in fields relating to the fields of finance and lending. While the EEOC does not recognize debtors as a protected class like other groups, minorities tend to have higher rates of indebtedness and insolvency, which could cause disparate hiring patterns and inadvertently shape the workforce when used as a hiring criterion.

A third criteria that employers should concern themselves with when performing background checks on individuals is the nebulous idea of character, which manifests itself in a few different ways. The most recognized example of this is employers requiring a pre-employment drug screening, and enforcing drug free work places. These tests are designed to catch illegal drug users, with those taking legitimate drugs for a disability or illness exempt from discrimination based on these results. Another potential site of discrimination in conducting searches is evaluating what legal activities individuals partake in their free time, such as political activities, unions or other associations.