1. 8/30/2015 © APSCREEN, Leading the Way Since 1980 1 Adventures in Factual Employment Screening Presented by, Thomas C. Lawson, CFE, CII Wednesday, June 27, 2012

2. 8/30/2015© APSCREEN, Leading the Way Since 19802 Today’s Topics EEOC’s Guidance Document on the use of criminal records ICRAA and YOU CASE REVIEW (Time Permitting)

3. 8/30/2015© APSCREEN, Leading the Way Since 19803 EEOC’s “New” Guidance Document What happened: On April 25, 2012 the EEOC voted 4 – 1 in favor of revised enforcement guidelines and employer guidance contained in: The Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act of 1964.

4. 8/30/2015© APSCREEN, Leading the Way Since 19804 EEOC’s “New” Guidance Document (cont’d) The “Guidance Document” can be found on the EEOC’s website: http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm as well as Questions & Answers: http://www.eeoc.gov/laws/guidance/qa_arrest_conviction.cfm

5. 8/30/2015© APSCREEN, Leading the Way Since 19805 What it Does Recaps prior EEOC guidance as well as case law and supersedes the old policy statements issued by the EEOC in 1987 and 1990 on conviction and arrest records. Identifies key areas of compliance Provides employer with general considerations Leaves enforcement and practice highly subjective in some areas and specific in other areas. (Just like all other EEOC Directives and Guidance Documents)

6. 8/30/2015© APSCREEN, Leading the Way Since 19806 What Does it all Mean, Mom? The end result is that “JRBN” (JOB RELATEDNESS AND BUSINESS NECESSITY) remain the legal “standard of care” for an employer’s defense against Improper/Non-Compliant Employment Screening claims.

7. 8/30/2015© APSCREEN, Leading the Way Since 19807 The “Standard of Care” is defined as: Validation Studies: “The employer validates the criminal conduct exclusion for the position in question in light of the EEOC’s Uniform Guidelines on Employee Selection Procedures,” OR; “Targeted Screening with Individualized Assessments," which means: “The employer develops a targeted screen considering at least the nature of the crime, the time elapsed, the nature of the job,” (the “Green” factors [Green vs. Missouri Pacific Railroad, 549 F.2d 1 158 -8th Cir. 1977])

8. 8/30/2015© APSCREEN, Leading the Way Since 19808 The “Standard of Care” is defined as: (cont’d) “The employer’s policy then provides an opportunity for an individualized assessment for those people identified by the screen, to determine if the policy as applied is job-related and consistent with business necessity.” The nature and gravity of the offense or offenses The time that has passed since the conviction and/or completion of the sentence, and The nature of the job held or sought Individualized Assessment

9. 8/30/2015© APSCREEN, Leading the Way Since 19809 The Good News About Option 2 Because ‘validation studies’ are extremely difficult and expensive and support of them through empirical social science data and social science statistics is not well-evolved, the Guidance Document readily admits that Option 2: “Targeted Screening with Individual Assessments” is the more likely and practical option for employers who rely on a criminal background check to determine candidacy.

10. 8/30/2015© APSCREEN, Leading the Way Since 198010 The Good News About Option 2 (cont’d) However... (According to the Guidance Document): “Individualized assessment generally means that an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job-related and consistent with business necessity.” “The individual’s showing may include information that he was not correctly identified in the criminal record, or that the record is otherwise inaccurate.”

11. 8/30/2015© APSCREEN, Leading the Way Since 198011 Factors to Consider for Individualized Assessment 1. Facts or circumstances surrounding the offense or conduct. 2. The number of offenses for which the individual was convicted. 3. Older age at the time of conviction, or release from prison. 4. Evidence that the individual performed the same type of work post-conviction, with the same or a different employer, with no known incidents of criminal conduct.

12. 8/30/2015© APSCREEN, Leading the Way Since 198012 Factors to Consider for Individualized Assessment (cont’d) 5. The length and consistency of employment history before and after the offense or conduct. 6. Rehabilitation efforts (e.g., education/training). 7. Employment or character references and any other information regarding fitness for the particular position. 8. Whether the individual is bonded under a federal, state, or local bonding program.

13. 8/30/2015© APSCREEN, Leading the Way Since 198013 Best Practices Identified in the Guidance Document Do not ask for criminal information on applications. Inquiries about convictions, if made, should be narrowly tailored and limited only to those that are job-related. Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct. The policy should identify essential job requirements and the actual circumstances under which the jobs are performed.

14. 8/30/2015© APSCREEN, Leading the Way Since 198014 Best Practices Identified in the Guidance Document (cont’d) The policy should also determine the specific offenses that may demonstrate unfitness for performing such jobs, and the duration of exclusions for criminal conduct. Record the justification for the policy, procedures, and exclusions, including a record of consultations and research considered in crafting the policy and procedures. Train managers, hiring officials, and decision makers on how to implement the policy and procedures consistent with Title VII.

15. 8/30/2015© APSCREEN, Leading the Way Since 198015 Practical Implications for Employers Eliminate policies that exclude applicants with “ANY” criminal record. Review your paper job applications and pre-hire documents. If you are using a web-based, applicant-entry system, consider removing any inquires about criminal history from the application. Your provider can adjust the software in most cases.

16. 8/30/2015© APSCREEN, Leading the Way Since 198016 Practical Implications for Employers (cont’d) Limit inquiries about criminal convictions to those which are job-related. These will be defined by your policy, and/or by those convictions that would specifically eliminate candidacy, and can be “on-the-fly” in my opinion, since defining every possible related conviction is impractical, and defensible. While individual assessment is not required by Title VII, the Guidance Document implies that without it, you will have a more difficult defense.

17. 8/30/2015© APSCREEN, Leading the Way Since 198017 Practical Implications for Employers (cont’d) Although undefined in the Guidance Document, make at least three attempts to contact the candidate to respond to the request for additional information. If no response is made after 10 days from the date of the first request, the employer can make a final decision without the additional information. Best Practice: How long or under what circumstances an employer must wait is not clear under the guidance document, and if practically speaking you are able to identify a better, more qualified candidate during that waiting period, then the time and notice guidance becomes mooted.

18. 8/30/2015© APSCREEN, Leading the Way Since 198018 Practical Implications for Employers (cont’d) If you use a third-party CRA to conduct criminal screenings, review your packages and their reporting policies to ensure compliance. If you use a third-party CRA to adjudicate criminal results, consider building in a review process to comply with the individualized assessment recommendations.

19. 8/30/2015© APSCREEN, Leading the Way Since 198019 Practical Implications for Employers (cont’d) Consider FCRA adverse action procedures and ways to incorporate the request for additional information needed for individualized assessments. Note that simply having a reputation for discouraging applicants based on race may invite investigation by the EEOC.

20. 8/30/2015© APSCREEN, Leading the Way Since 198020 Practical Implications for Employers (cont’d) Large applicant pools have greater potential for disparate impact, so big employers with high turnover should seek counsel in determining the best means of compliance. Compliance with a Federal law/mandate that conflicts with the Guidance is a defense. State and local mandates are NOT a defense. They are pre- empted by Title VII if they “purport to require or permit the doing of any act which would be an unlawful employment practice” under Title VII.

21. 8/30/2015© APSCREEN, Leading the Way Since 198021 BREAK

22. 8/30/2015© APSCREEN, Leading the Way Since 198022 ICRAA and YOU What is ICRAA? On January 1, 2012, Revisions to certain sections of Cal. Civil Code 1786.10 – 1786.60) known as: “THE INVESTIGATIVE CONSUMER REPORTING AGENCIES ACT” went into service after passage in order to clean up conflicting aspects of several “interim” related statutes. The new law clarified AB 22, AB 655 and the original CA Civil Codes 1785 & 1786 enacted on January 1, 2002.

23. 8/30/2015© APSCREEN, Leading the Way Since 198023 ICRAA and YOU (cont’d) Changes under the ICRAA Some of the more important changes in the clean-up legislation for employers and HR professionals are: 1. References: The new law clarifies that under Civil Code section 1786.53, in-house references obtained by an employer DO NOT have to be turned over to applicants. (Under AB 1068, an employer would have to turn over any public records, such as criminal convictions that it found on its own, but not reference checks).

24. 8/30/2015© APSCREEN, Leading the Way Since 198024 ICRAA and YOU (cont’d) Changes under the ICRAA Best Practice: OVERCOMPLY - Don’t send the Reference Check Report as a Reference Report is considered subjective and not factually based, but send evidence where an employment or education history was not validated so you have a defensible position in denying candidacy based on the omission or falsification, and you are providing the candidate with information to help them straighten out any record anomaly.

25. 8/30/2015© APSCREEN, Leading the Way Since 198025 ICRAA and YOU (cont’d) Changes under the ICRAA 2. Providing Reports to Applicants: Based in part upon a proposal from the author of the article, the law no longer requires employers to provide every background report to each applicant. Instead, each applicant will have the ability to check off a box on a disclosure sheet and have a background-screening firm send the report directly to the applicant. A similar rule already exists in California for credit reports. Best Practice: OVERCOMPLY - Send a copy of the report to ALL candidates, regardless of the law because your most defensible position is to be able to prove that you gave the candidate EVERY opportunity to dispute ANY possible factual discrepancies or inaccuracies in the report that you used to determine eligibility.

26. 8/30/2015© APSCREEN, Leading the Way Since 198026 ICRAA and YOU (cont’d) Changes under the ICRAA 3. Employee Investigations: Section 1786.55 clarifies that the new law is not intended to modify existing law concerning internal investigations of current employees suspected of misconduct or wrongdoing (except for obtaining public records), or employer reference checking. However, the federal FCRA still applies to investigations by third parties. Best Practice: Have your lawyer officially sanction and oversee ALL internal investigations.

27. 8/30/2015© APSCREEN, Leading the Way Since 198027 ICRAA and YOU (cont’d) Changes under the ICRAA 4. Limitations on “Do-It-Yourself” or “in-house” employment screening: If an employer does their own investigation of an applicant or current employee without using the services of a background-screening provider and collects public records such as criminal records, there are new rules that are in effect. Any information must be turned over to the applicant/employee within seven days unless the employer suspects misconduct or wrongdoing in which case supplying the information may be delayed. In addition, an employer who uses this procedure must provide a form to all applicants/employees with a box that, if checked, permits a person to waive the right to receive the copy of any public record. If the investigation results in an adverse action, there are additional requirements as well. This procedure is only in effect if an employer does its own investigation.

28. 8/30/2015© APSCREEN, Leading the Way Since 198028 ICRAA and YOU (cont’d) Changes under the ICRAA Best Practice: OVERCOMPLY – Follow not only this new rule but also the Consumer Reporting Agency standard and send a copy of your carefully written internal report which includes any covered reports to the candidate, such as defined as “public records” under AB 1068 (AB2868 if conducting an internal investigation). Your position of candidacy denial will appear less subjective if your candidate sees what you looked at and what might have affected his/her candidacy, just like you would do if you used a screening firm. Consistency and “spirit” applies here in spades.

29. 8/30/2015© APSCREEN, Leading the Way Since 198029 ICRAA and YOU (cont’d) Changes under the ICRAA 5. Limitation on Criminal Record Searches: The new law retains the seven (7) year limitation on a background-screening firm obtaining criminal records. This addresses a conflict between California law and situations where certain employers are required to go back further in some cases. However, the new law clarifies that there is an exception for employers that are required by a governmental agency to go back further when checking qualifications. Best Practice: Review the reporting laws for your industry and determine for yourself how far you may go back. See: http://www.leginfo.ca.gov/cgi- bin/waisgate?WAISdocID=57054621134+0+0+0&WAISaction=retrievehttp://www.leginfo.ca.gov/cgi- bin/waisgate?WAISdocID=57054621134+0+0+0&WAISaction=retrieve See Section 1716.18 (a) (7); & (8) (b) (2); & (8) (c)

30. 8/30/2015© APSCREEN, Leading the Way Since 198030 ICRAA and YOU (cont’d) Changes under the ICRAA 6. Employer forms used for background screening: Employers that utilize the services of a background screening firm should have received, shortly after AB 655 (CCC 1785 & 1786, effective on January 1, 2002); a revised certification form required of all California employers as well as a revised Disclosure that applicants must receive. Because of the changes in the law, employers should receive a new set of forms reflecting the new requirements. Best Practice: Make sure your Screening firm’s forms meets or exceeds the guidelines established under the ICRAA, by going to the following website: http://www.leginfo.ca.gov/cgi- bin/displaycode?section=civ&group=01001-02000&file=1786.10-1786.40http://www.leginfo.ca.gov/cgi- bin/displaycode?section=civ&group=01001-02000&file=1786.10-1786.40 See Section 1786.20

31. 8/30/2015© APSCREEN, Leading the Way Since 198031 Penalties for Violations Violations of the ICRAA can result in stiff penalties for the company that issued the report and for the user of the report (the employer). (CA Civil Code 1786.50) Under the ICRAA, you can sue for actual damages or $10,000, whichever is greater. Class action lawsuits are allowed. Court costs and attorney fees can also be awarded. And the court can award punitive damages if it finds the violation was grossly negligent or willful. The right to sue for privacy invasions or defamation is not affected.

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