Background checks: It’s not a “good thing” 3

Background checks: It's not a

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By Christian Schreiber

Consider the following hypothetical.  You own a restaurant and you’re looking for an assistant to the head chef.  The applicant needs to be able to cook, yes.  But the position also requires administrative skills – ordering, inventory, relationships with vendors and staff.  Creativity with the menu would be a plus.  A woman comes with lots of relevant experience. You notice she has a six-month interruption in her resume in late 2004, early 2005.

Years ago, an interview might have sufficed; perhaps you would have called her references, or tried her out on a lunch shift.  Today, in addition to the tryout and the references, you ask her to authorize a background check.  In the meantime, she wows you on the lunch shift.  Her plates look great.  She cleverly rearranges the pans between orders.  Then you get back her background check: she was convicted in federal court of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigators.  Does she get the job?

While the dark potential of our information age remains thankfully unrealized, the workplace remains a frontier of personal data collection and snooping.  The ACLU claims that “it receives more complaints about privacy in the workplace than about any other issue.”

For workers, this unquenchable thirst for more information often first presents itself under the auspices of “background checks” (called “consumer reports”) required by employers.  Where background checks were once the province of private investigators and reserved for high-level executives, now even low-wage workers are asked to authorize employers (and potential employers) to investigate their “character, general reputation, personal characteristics, or mode of living.”  The trend is dangerous and often serves as the pretext for discrimination that would otherwise be prohibited under State and federal anti-discrimination law.

One of the most popular myths is that employers who screen candidates for credit histories and criminal records can reduce their potential liability from “bad hires.”  Some courts have even adopted the rhetoric that background checks embrace a “common sense” approach because they help employers “better evaluate the trustworthiness, reliability, and effectiveness of prospective employees.”  Yet, while other “common sense” claims hold up based on evidence of their truth, in this arena, employers have never even been asked for any proof that credit and criminal background checks increase retention rates, worker productivity, or diminish liability for negligent hiring or supervision.

In fact, consumer reports are notoriously flawed. The Federal Trade Commission and its successor, the Consumer Financial Protection Bureau, have claimed there may be as many as 42 million Americans with errors on their credit reports.  But this is only part of the problem.  Despite propaganda from the industry, race and gender result “substantial differences in credit scores across racial groups…with blacks and Hispanic whites having notably lower credit scores than other racial groups. These racial differences persist, even after controlling for other demographic characteristics such as age, marital status, and an estimate of income.”  Though the law is still evolving in this area, denying employment on the basis of a bad credit history, therefore, may be tantamount to denying employment on the basis of race.

For workers with criminal histories, background checks present a more obvious and intractable problem.  As a practical matter, criminal background checks are often harmful beyond the criminal conviction history they may include.

Like credit histories, they are frequently incorrect—sometimes the reports mix up identities (are you the same “Michael Miller”?), omit essential information about the offense or the disposition, or misstate charge levels or convictions.  By the time such errors are challenged or corrected (companies have up to 30 days), employers have already moved on to the next applicant.  This can also involve purely practical considerations: employers may understandably have difficulty sifting through charging codes, references to statutes, or interpreting dismissals and dispositions.  Is it worth understanding a complicated report when a stack of “simple reports” offers a large enough applicant pool?

Or consider an individual who has had her record “expunged,” a process whereby the individual withdraws a guilty plea and the court dismisses the charges.  Consumer reporting agencies often unlawfully report both the conviction and the dismissal, which they then claim is “factually accurate.”  One can fairly ask what purpose the expungement serves if it fails to shield the conviction from later disclosure.

As the government grows more opaque, criminal records have become more public.  The increase in computerized public records has made background checks easier and cheaper to obtain.  What once required a trip to the courthouse is now accomplished by a few seconds at the keyboard.  Consumer reporting agencies use sophisticated databases to package, market and sell criminal record information and credit histories to anyone with curiosity and a credit card.

This isn’t to suggest that childcare providers shouldn’t have access to criminal records of convicted child abusers, or that employers should not be able to discuss resume gaps with applicants and evaluate a potential employee’s record on a case-by-case basis.

Ultimately, given the over-representation of African Americans and Latinos in the criminal justice system, using criminal background histories is itself a race-conscious undertaking.  This alone should give employers pause.  Blind reliance on background checks of dubious reliability used to prescreen applicants only encourages discrimination.  More importantly, it denies willing and capable workers, including ex-offenders, the opportunity to make an honest living.

Christian Schreiber

About Christian Schreiber

Christian Schreiber is a partner at Chavez & Gertler, where he works primarily on class actions involving employment and consumer rights, civil rights, and financial services matters.

Thinking “outside the box” means “banning the box”

Thinking

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By Christian Schreiber

Last month the U.S. Supreme Court again refused a request by Governor Jerry Brown to stay a Ninth Circuit decision ordering the release of 9,600 inmates by the end of the year.

In spite of the decision, no reasonable person believes the streets will be teeming with violent criminals on New Year’s Day.  What is certain, however, is that the ranks of California’s unemployed will swell with those former prisoners, as those released will join thousands of other “ex-cons” unable to find work because of their past criminal convictions.  While news of sluggish job growth and lingering unemployment cycles through the front pages every few weeks, scant attention is paid to the legal obstacles placed in the path of thousands of would-be workers who have been convicted of a crime.

Momentum has been building to address at least one of those obstacles – the dreaded “paper screen” intended to ferret out applicants with criminal records.  Governor Brown’s signature on Assembly Bill 218 placed California among a growing list of jurisdictions that are “Banning the Box.”

Ban-the-Box initiatives were originally pushed by formerly-incarcerated people.  They believed that by eliminating the kind of “check the box”-type question —  “Have you been ever been convicted…” — from employment applications, they might be given a fair opportunity to prove their worthiness for the job.  Now employers, including most recently Target, are seeing the wisdom of the approach.

Help for former prisoners re-entering the workforce is long overdue.  The United States leads the world in incarceration rates, and California ranks at or near the top of every list measuring the number of individuals in federal or state prison, local jails or under supervised release.  According to the Department of Justice, Bureau of Justice Statistics, incarceration rates have fallen slightly the last two years, meaning more former prisoners are re-entering the work force each year.

Ban-the-box legislation is just the first step, but it’s an important one.  In the absence of legal protections, what former prisoners face can barely be distinguished from Jim Crow.  Individuals with past criminal convictions face discrimination that is not only common, it’s effectively encouraged.  No group continues to be discriminated against so openly, with base racial prejudices endorsed at the highest levels.  Supreme Court Justice Antonin Scalia no doubt speaks, albeit in code, to these unconscious racial fears many people have about the release of any inmates—whom he describes as “fine physical specimens who have developed intimidating muscles pumping iron in the prison gym.”

Justice Scalia’s myth of a super-criminal appears to have more in common with his taste in TV or literature than it is does in reality, where nearly a third of released prisoners are over 40.  But he’s hardly alone.

Few constituencies are more marginalized than former prisoners.  Our willingness to dehumanize former prisoners ignores the simple fact that the only difference between “them” and “us” is that they got caught while we got jobs, and get to keep them.

Stories of redemption are easy to find, though countless others we don’t hear about break the other way.  It’s time we treated ex-offenders individually and on their own merits so that redemption can become the rule, and not the exception.

Christian Schreiber

About Christian Schreiber

Christian Schreiber is a partner at Chavez & Gertler, where he works primarily on class actions involving employment and consumer rights, civil rights, and financial services matters.

EEOC loses battle (but not war) on discriminatory background checks 2

EEOC loses battle (but not war) on discriminatory background checks

By Christian Schreiber

When it dismissed a federal lawsuit last week, the U.S. District Court for Maryland made it even harder for workers with poor credit histories and past criminal convictions to find a job.  Civil rights advocates hope the decision is not a bellwether for similar cases pending around the country.

The lawsuit, brought by the federal Equal Employment Opportunity Commission, charged Freeman, a privately-held event-management company, with violating Title VII of the Civil Rights Act through its use of credit and criminal background checks.  According to the EEOC’s complaint, the employer’s decision to use background checks to screen out job applicants amounted to discrimination because it disproportionately impacted African-American and male job applicants.

Freeman’s hiring process involved detailed inquiries into both the applicant’s credit histories and criminal backgrounds.  Freeman “regularly ran credit checks for 44 job titles,” and excluded all applicants from certain positions who met any of 12 different categories of purported credit-unworthiness.  Even common credit blemishes, such as credit card charge-offs, medical liens, unpaid student loans, or foreclosures would result in the applicant being rejected.

The Freeman court joined the chorus of employers extolling what some consider the “common sense” of performing credit and criminal background checks.    These proponents also ignore the studies demonstrating that credit problems do not predict employee performance, as well as those that document atrocious error rates on credit checks.   A report released by the Federal Trade Commission earlier this year found that a quarter of consumers identified errors on their credit report that might affect their credit scores.

In 2011, California limited the use of credit checks in employment.  After three prior attempts were vetoed by Governor Schwarzenegger, the bill was itself an object lesson in persistence.  However, the law also established broad exceptions to the “prohibition” on employment-related credit checks, effectively blessing their use across jobs and industries where the need or utility has never been demonstrated.

In addition to the credit-check hurdle, Freeman’s standard employment application form asked, “Have you ever pleaded guilty to, or been convicted of, a criminal offense?”  Applicants were told certain convictions would not be considered in the hiring process (yeah, right), but the company acknowledged a “bright-line rule” that disqualified any applicant who “failed to disclose a conviction, seriously misrepresented the circumstances of a criminal offense, or made any other materially dishonest statement on the application.”

In June, the EEOC filed two similar complaints against Dollar General Corp and BMW, alleging that the companies’ use of criminal background checks resulted in a disparate impact against African-American job applicants.  Referred to as “disparate impact” cases, these types of challenges stand or fall on the persuasiveness of the parties’ statistical evidence.  In the EEOC v. Freeman case, the court let loose on the EEOC’s expert, excoriating his methodology and ultimately calling his findings “an egregious example of scientific dishonesty.” (Ouch.)  Though it may be possible to blunt the impact of Freeman simply by putting on better statistical evidence, the decision nonetheless entrenches practical misconceptions and legal standards that are hostile to workers.

These cases are being watched closely by consumer and civil rights advocates, who still hold out hope that the EEOC’s oversight of these employment policies will curtail the increasing use of background checks to screen out applicants.   Advocates hope Freeman doesn’t signal that more bad news lies ahead.

Christian Schreiber

About Christian Schreiber

Christian Schreiber is a partner at Chavez & Gertler, where he works primarily on class actions involving employment and consumer rights, civil rights, and financial services matters.

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