Using Criminal Records, Credit Ratings is Risky Business in Hiring

Employers should scrap policies that bar hiring people with criminal records, and should avoid using credit reports to screen job candidates, employment-law attorneys told a business group Tuesday.

Considering a prospective employee's arrest or criminal record, or inquiring about their credit status, before even offering them a job, are practices that can put a company at risk of violating federal law, said Jeffrey Burstein, senior trial lawyer for the Equal Employment Opportunity Commission in Newark, and Catherine Wells, head of the employment law department at Wolff Samson in West Orange. Burstein and Wells were speakers at a roundtable, held at the Hilton&nbspHasbrouck Heights about making employment decisions under Title VII, which forbids discrimination based on race, color, religion, sex and national origin.

They addressed members of the Commerce and Industry Association of New Jersey, based in Paramus. During her presentation, Wells also warned employers not to troll around the Facebook accounts of prospective hires. Companies that use social media to gather information on potential employees risk litigation charging them with defamation, invasion of privacy and violating laws that ban making employment decisions based on lawful off-duty conduct, Wells said. Although Title VII doesn't specifically address criminal records and hiring, the law does prohibit "disparate treatment" of specific classes of people, Burstein said. For example, just asking people of color about their criminal history, but not Caucasians, constitutes discrimination in hiring, he said.

National data shows that criminal-record exclusions have a disproportionate impact on blacks and Hispanics, who are arrested at a rate two to three times their proportion to the general population, he said. An arrest record isn't proof any criminal conduct took place, and the final disposition of the case, such as a dismissal or acquittal, may not be reported, Burstein said. Records of convictions or guilty pleas can be inaccurate or outdated, he added. The bottom line is companies should generally not inquire about criminal records until they've extended a job offer to a candidate. Such a record should impact hiring only if an employer can validate the impact of a record on job performance, he said. Best practices for employers are to eliminate broad policies that exclude hiring people who have criminal records, to develop narrowly tailored written policies and to handle candidates on a case-by-case basis, Burstein said. "If you have a blanket policy, you are very clearly risking Title VII liability," Burstein said. Earlier this month, Pepsi Beverages agreed to pay a $3.13 million settlement to African-American applicants for using arrest records as part of its hiring process. There are exclusions to Title VII, Burstein said, which make criminal records lawful reasons not to hire airport security screeners, federal law enforcement officers, child care workers and bank employees. Burstein also discussed how employers risk violating employment laws by inquiring about a job candidate's credit rating.

Such ratings tend to "more adversely" impact minorities and women, Burstein said, and are often inaccurate. The reasons for a negative credit rating - including identity theft, divorce, death of a spouse, co-signing a relative's loan and being laid off from a prior job - are often unrelated to a prospective candidate's ability to perform a job, Burstein added. Cornell William Brooks, president of the New Jersey Institute for Social Justice, and its senior counsel and policy director, Craig Levine, attended the roundtable to lobby for "Ban-the-Box" legislation for New Jersey. The institute has been working with the business community on the bill. Under the proposed law, employers could not have "a box" on job applications asking candidates about their criminal history.

Such inquiries would be delayed until later in the hiring process, "which allows a person to put before an employer their skills, their qualifications, their resume, their background, evidence and indicators of their commitment ... to getting hired," Brooks said. Currently, 40 jurisdictions, states and cities have ban-the-box laws, Levine said. "If you comply with ban the box, almost automatically are in compliance with Title VII and you have no liability worries," Levine said.

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