Last week, I got a panicked call from my good friend, “Joe”. He was in a quandary about what to do because he had just received word that the background check of a recently hired (and now on-the-job) employee revealed a criminal conviction five (5) years ago for check fraud. Literally, his question to me was “now what?” The answer, as it turns out, is not as complicated as you might think.
Even in today’s employee-friendly environment, criminal convictions by candidates and employees can still justify either refusing to hire or severing the employment relationship. The key is that not all criminal convictions are created equal; some simply cannot form a legitimate basis to disqualify or terminate someone. However, many types of felony convictions may disqualify someone for employment; it just depends on the type of conviction and the type of job the individual has been asked to perform for your company. Moreover, in recent years the method and process by which you may retrieve a person’s criminal history has changed. Gone are the days where you can include a question on an initial employment application that asks: “have you ever been convicted of a crime,” and then automatically disqualify all the applicants that checked “yes.” The EEOC’s cautionary guidance on the use of criminal history, along with the recent proliferation of “ban the box” legislation in over a dozen jurisdictions (with likely more to follow) have to a large extent eliminated the blanket “criminal conviction” disqualifier as part of the application process.
In response, many companies that have multi-jurisdictional operations have opted to postpone the criminal record inquiry until a later stage in the process – say until after an initial offer of employment is made. By postponing that inquiry, companies can often avoid allegations of a discriminatory hiring process or running afoul of “ban the box” laws that have proliferated. But there are two sides to every coin. As Joe found out, by delaying the criminal background check until after the offer of employment, companies may not receive details of the person’s criminal history until after he has already started work.
- Does the Conviction Warrant Separation?
First, as I explained to Joe, make a determination as to whether the employee’s conviction merits separation. Would terminating the employee, to use the EEOC’s phraseology, be “job related and consistent with business necessity?” This essentially involves evaluating whether the nature of the conviction might negatively prevent the employee from performing his job duties satisfactorily. Here, Joe’s employee was hired as a computer programmer, whose job required no check writing or other “money handling” responsibilities. So it’s hard to imagine how writing a bad check would disqualify someone from programming a computer. Aside from the nature of the crime, the date of the crime can also be relevant. While federal anti-discrimination laws place no bright line test for “how old is too old” when it comes to criminal convictions, many states now have laws that make it illegal to consider convictions beyond a certain age. They differ from state to state, so check the law in your jurisdiction when walking through this analysis.
Other considerations may play into this determination as well. For example, if you are a federal contractor, a conviction for “check fraud” may disqualify an employee from being allowed on a federal installation, obtaining the necessary security clearance, or prohibit him from obtaining some other type of required certification. In that case, your decision becomes easier. If the conviction prevents the employee from obtaining the necessary access or certification to perform the job, then separation could well be your only option. But this was not the case for Joe’s employee. Joe determined that his employee’s conviction was not disqualifying and so he decided to retain his new employee. But what if the conviction had been potentially disqualifying? Then what?
- Complying with the Fair Credit Reporting Act
Things might have turned out differently for Joe’s employee had he been hired as managerial employee who had “money handling” or other financial responsibilities. In that case, his 5-year-old check fraud conviction could well have been “job related” and his termination “consistent with business necessity.” But even in this situation, had Joe terminated the employee immediately upon discovering the conviction, Joe could have put his company at risk.
Under the Fair Credit Reporting Act (“FCRA”), employees whose background checks turn up negative information have a right to notice and an opportunity to dispute the adverse findings before you up and fire them. This intervening period is designed to give the employee an opportunity to correct or dispute the negative information. After all, you would not want to fire an employee based upon a criminal conviction committed by somebody else with the same name! That’s why the FCRA requires employers to provide both a pre-adverse action notice and then a subsequent adverse action notice if the employer decides to proceed with termination or rescind an offer of employment. Fortunately, reputable background check companies have made this process less burdensome for employers by providing the appropriate forms and notices once the employer notifies them that it intends to act upon negative information contained in the background report. Note, however, it is ultimately the employer’s responsibility to make sure the employee receives the appropriate FCRA protections; so engage the assistance of your background check company early and often when going through this process.
- Tips for Being Prepared
This is likely not a situation you will encounter every day; and each situation has to be evaluated individually. But don’t do as Joe did and wait until the day it happens to “phone a friend” to try and find the answer; instead, put a plan together so that you are prepared to handle it when it does arise. Things you should do now include: (a) determining when in the process your are allowed to (and when in the process you want to) require a criminal background check of your applicants or new-hires, (b) explain to the person at an early stage in the application process that they will eventually have to pass a background check and disclose their criminal convictions, (c) include language in the offer letters to employees that states their employment is “at will” and that the offer of employment is expressly contingent upon their successful completion of a background check, (d) ask your background check vendor now about their procedures with respect to the FCRA, and (e) make sure you have updated job descriptions for those positions for which you will require a background screen (so that, if need be, you can accurately determine whether the person’s criminal convictions are “job related”).
C2 provides strategic HR outsourcing to clients who want to develop optimal workforce strategies and solutions to allow them to be more competitive and profitable. C2 blog posts are intended for educational and informational purposes only.