On January 29, 2013, the Office of Federal Contract Compliance Programs (“OFCCP”) issued Directive Number 306 (the “Directive”) warning federal contractors and subcontractors about potential discrimination claims that could result from their use of criminal conviction records. Over the last several years, federal, state, and local governments have increasingly cracked down on employers using criminal convictions to screen applicants. On April 25, 2012, the Equal Employment Opportunity Commission (“EEOC”) issued detailed guidance on the best practices for employers to avoid discrimination claims when using arrest and conviction records to make employment decisions.
The Directive essentially adopts the EEOC’s enforcement guidance and notifies federal contractors that they “should be mindful of federal antidiscrimination laws if they choose to rely on job applicants’ criminal history records for purposes of employment decisions . . . .” OFCCP explained that, although an individual’s criminal history is not specifically protected by federal anti-discrimination laws, the use of such records could result in disparate impact on certain racial or ethnic groups. Consistent with the EEOC’s guidance, the OFCCP explained that contractors can use criminal records to make employment decisions only when they are “job related and consistent with a business necessity under Title VII.” According to the Directive, contractors can meet this exception by either (1) making certain that screening procedures based on criminal conviction records are validated in accordance with the Uniform Guidelines on Employee Selection Procedures (“UGESP”); or (2) meeting the following three factors:
- The nature and gravity of the criminal conduct is severe;
- The time that has elapsed since the offense was committed is not significant; and
- The candidate’s criminal history is directly relevant to the nature of the job in question.
The OFCCP also “commended” the EEOC’s “best practices” for use of conviction and arrest records. The OFCCP specifically advised that:
contractors may consider ensuring that any policies and procedures that screen applicants and employees for criminal conduct require an individualized assessment. Such policies and procedures should be narrowly tailored to the essential job requirements and actual circumstances under which the jobs are performed; to the specific offenses that may demonstrate an unfitness for performing such jobs; and to the appropriate duration of exclusions for criminal conduct, based on all available evidence. Like the EEOC, OFCCP recommends that contractors, as a general rule, refrain from inquiring about convictions on job applications. Further, OFCCP recommends, if and when contractors make such inquiries, the inquiries are limited to convictions for which exclusion would be job-related for the position in question and consistent with business necessity. Finally, information about applicants’ and employees’ criminal records should be kept confidential and only used for the purpose for which it was intended.
In addition, the Directive discussed the new procedures affecting contractors that utilize federally-assisted workforce systems. These new procedures require that candidates be given notices of the potential for adverse impact if they may be excluded from a position based on their criminal record. OFCCP also alerts contractors of the restrictions flowing from other laws addressing the use of criminal records, such as the Fair Credit Reporting Act (“FCRA”) and the Work Opportunity Tax Credit (“WOTC”).
It is unclear whether OFCCP will more intensely scrutinize contractors who use criminal conviction records to make employment decisions. OFCCP, however, has been very interested in investigating employers’ pre-employment tests and screening procedures that show statistically significant adverse impact on based on race or gender. As a result, contractors should ensure that any screening procedures relying on criminal convictions are properly validated in accordance with the UGESP and analyze their selection decisions to determine whether there is any statistically significant adverse impact. Contractors should also inventory any positions that require a criminal history check to make certain that the candidate’s criminal history is relevant to the position, such as positions that require financial or fiduciary responsibilities or high level managerial positions.