Great Lakes Wire

The ongoing expansion of ban-the-box laws highlights a legal risk for employers who continue to use pass/fail background check policies. These policies, which dismiss applicants without individualized assessments, expose companies to potential lawsuits. Legal actions are not limited to individual complaints; class action lawsuits are increasingly common as law firms seek plaintiffs.

In 2024, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit against an employer for discriminatory practices that disproportionately affected minorities. The employer argued that their pass/fail system was necessary for maintaining a safe work environment. However, EEOC Regional Attorney Debra M. Lawrence emphasized that "even when such necessity is proven, the practice remains unlawful if there is an alternative practice available that is comparably effective in achieving the employer’s goals but causes less discriminatory effect."

The EEOC identified several issues with the employer's practices: lack of dialogue with applicants about report items, no review of adverse actions beyond initial screening, absence of report verification discussions with applicants, and no option for applicants to appeal decisions.

Employers are encouraged to conduct individual assessments considering the nature and gravity of offenses, time elapsed since offenses occurred, and relevance to specific positions. Rehabilitation efforts should also be evaluated. Engaging with applicants can provide insights into mitigating circumstances. The EEOC offers guidance on this topic at their website.

Certain jurisdictions mandate written assessments detailing how background check information relates to job positions. Employers must comply with laws in all areas where they operate, especially given the rise in remote work. Laws apply based on where employees live and work.

Employers using staffing agencies should ensure these agencies adhere to non-discriminatory hiring practices to avoid liability for discriminatory actions by third parties.

By Susan Chance, courtesy of SBAM-approved partner ASE.