USING CRIMINAL BACKGROUND CHECKS TO SCREEN APPLICANTS AND TERMINATE EMPLOYEES? BEWARE – THE EEOC MAY BE COMING FOR YOU
On June 11, 2013, the EEOC issued a press release announcing that it had filed suit against two employers, BMW and Dollar General, alleging that they had violated Title VII of the Civil Rights Act by implementing and utilizing a criminal background policy that resulted in employees being fired and applicants being denied employment. In the press release, the EEOC stated that it is committed to using public education and informal resolution to address discriminatory hiring practices but, “when these methods are unsuccessful, the Commission will, if necessary, seek redress from the federal courts and ensure equal opportunity for all.” The EEOC further stated that the filing of these suits are “the latest in a series of systemic cases the Commission has filed to challenge unlawful hiring practices.”
According to the Complaint against BMW, filed in the U.S. District Court for the District of South Carolina, the EEOC specifically alleges that BMW maintains a criminal conviction background check policy that has a disparate impact on black employees and applicants, and that as a result of its use of this policy, BMW denied such individuals access to its manufacturing facility in Spartanburg, South Carolina, and deprived them of employment opportunities. Along with a request for injunctive relief to prevent future discrimination, the EEOC is also seeking monetary damages in the form of back pay, plus prejudgment interest, for all aggrieved employees.
The EEOC alleges that BMW’s written criminal conviction background check policy excludes individuals with convictions of the following categories of crime: murder; assault & battery; rape; child abuse; spousal abuse (domestic violence); manufacturing of drugs; distribution of drugs; weapons violations; theft; dishonesty; and moral turpitude. Furthermore, the EEOC alleges that the policy dictates that any convictions of a violent nature are grounds for employment rejection, regardless of the length of time that has passed since the conviction, and the policy fails to make a distinction between felony and misdemeanor convictions. The EEOC also alleges that the policy fails to provide an assessment of whether the crime has any relationship to the nature of the job position. Finally, the EEOC alleges that BMW’s policy “operates to exclude disproportionate percentages of blacks.” In support of this assertion, the EEOC reports that, as a result of the use of the background check policy at the facility in question, a total of 88 employees were excluded and, of those 88 employees, 80% were black and 20% were “non-black.”
The EEOC also issued recently a press release announcing that another large employer, J.B. Hunt Transport, Inc., has agreed to settle a race discrimination charge filed against it. In the release, the EEOC states that the charge was initially filed by an African-American job candidate who was denied a truck driver position at J.B. Hunt based on a criminal conviction record that the EEOC contends was unrelated to the duties of the job. As part of its investigation of the charge, the EEOC reviewed the company’s policy with respect to the hiring of job applicants with conviction records and found that it contained blanket prohibitions that were not in accordance with the Commission’s guidelines on the use of arrest and conviction records. According to the press release, J.B. Hunt has agreed to review, revise if necessary, and provide additional training concerning its hiring and selection policies in order to comply with EEOC guidelines. In addition, the company has reportedly entered into a private settlement agreement with the individual who filed the charge. The EEOC advised in the press release that “eliminating barriers in recruitment and hiring, especially class-based recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women and people with disabilities, is one of six national priorities identified by the EEOC’s Strategic Enforcement Plan.”
Based on the press releases issued, as well as the charges and lawsuits filed by the EEOC, it is clear that the Commission intends to continue its heightened focus on employers’ use of criminal conviction records. As such, it is important for employers to take steps to avoid investigation, and possibly litigation, brought by the EEOC. According to the EEOC’s guidelines on this issue, employers can avoid liability and show that their criminal background check policies are properly job-related and consistent with business necessity by showing: (1) the policy takes into consideration the nature of the crime, the time elapsed since the criminal conduct occurred, and the nature of the specific job in question; and (2) the policy gives an applicant the opportunity to show why he/she should not be excluded based on their criminal history.
It is important to note that the EEOC’s position does not call for a complete prohibition of the use of any criminal conviction information. Rather, it appears to prohibit employers from using such information when it is not sufficiently job-related or consistent with business needs. Thus, employers would be wise to implement a policy that links specific types of criminal activity with the required job duties of the position sought or held. For example, the use of a theft conviction would be appropriate for an applicant seeking a position which entails access to company funds.
Employers who currently have criminal background check policies, or are looking to implement a new policy, should contact their legal counsel to review and/or draft such policies to ensure compliance with EEOC guidelines and to avoid costly investigation and litigation by the Commission.
THE SUPREME COURT OFFERS GOOD NEWS TO EMPLOYERS
June 24, 2013, was a good day for employers. The Supreme Court of the United States rendered two decisions that, in short, made it more difficult for employees alleging certain unlawful conduct under Title VII to hold their employers liable.
More specifically, in Vance v. Ball State University, the Court’s holding settled a circuit court split over who may be considered a “supervisor” for the purpose of determining whether an employer may be vicariously liable for alleged acts of workplace harassment. This was a question left open by two 1998 Supreme Court decisions, Faragher and Ellerth. In those decisions, the Court adopted the term “supervisor” as a way of designating the class of employees whose conduct could give rise to vicarious liability for employers. On the one hand, if the harassing employee is the plaintiff’s co-worker, the employer is liable only if the employer was negligent in controlling the working conditions (i.e., the employer did not act reasonably with respect to the workplace or in responding to complaints). On the other hand, if the harassing employee is the plaintiff’s supervisor and the conduct resulted in a tangible employment action, the employer is strictly liable. If the supervisor’s harassment did not result in a tangible employment action, to escape liability, the employer has the burden of proving (as an affirmative defense) that it “exercised reasonable care to prevent and correct the harassing behavior and . . . that the plaintiff unreasonably failed to take advantage of the preventative or corrective opportunities that the employer provided.”
Given this framework, the more broadly the term “supervisor” is defined, the better for the plaintiff. Understanding this, the plaintiff in Vance argued that the Court should adopt the EEOC’s more “open-ended” definition that ties a person’s supervisor status to the authority to significantly direct another’s daily work. Because the alleged harasser in Vance had this authority over plaintiff, she argued the harasser was her supervisor. The Court rejected this definition and plaintiff’s contention, finding that the EEOC’s definition is “nebulous” and its application would lead to more, not less, certainty for jurors in evaluating the merits of the Title VII claims.
Instead, the Court adopted a definition that it deemed to be more readily determinable, often at the summary judgment stage; namely, a supervisor is one who has been empowered by the employer to hire, fire, demote, promote, transfer, or discipline the alleged victim. Accordingly, simply because a person has the authority to direct another employee’s daily tasks does not render that person a “supervisor” under Title VII.
In addition to the Court’s holding in Vance, the Court in University of Texas Southwestern Medical Center v. Nassar made it harder for employees alleging retaliation claims (as opposed to discrimination) under Title VII to prevail. The Court held that a plaintiff must prove that, but for his/her protected activity, the plaintiff would not have suffered an adverse employment action. Thus, under Nassar, a plaintiff can no longer prevail on a retaliation claim under Title VII by showing that the employer merely was motivated in part by the protected activity. As a basis for its holding, the Court presumed that Congress incorporated tort law’s causation-in-fact standard when it wrote the section of Title VII pertaining to retaliation claims to provide that it is unlawful for an employer to discriminate against its employees because he engaged in protected activity.
Also, the Court noted that, while leaving this standard with respect to retaliation claims alone, Congress amended the section of Title VII pertaining to “status based discrimination” (like that based on race, color, religion, sex or national origin) to state specifically that plaintiffs could prevail on “status based discrimination” claims if they can show that the protected characteristics were a motivating factor in the employment decision. Thus, Congress’ intent appeared clear to the majority of the Court that the “but for” causation standard should apply to Title VII retaliation claims.
What are the implications of these decisions? Both decisions will better enable employers to defeat Title VII harassment and retaliation claims at the summary judgment stage and will enable both parties to more accurately assess the merits of such claims. Also, Nassar should lessen an employer’s risk of liability in those instances when an employee, who anticipates an adverse employment action based on well-documented legitimate non-discriminatory reasons, decides to protect himself by claiming discrimination.
It is important to note, however, that employers may still be liable for workplace harassment of a co-worker even after Vance when the employer acted negligently by, for example, failing to monitor the workplace, inadequately responding to complaints, creating a workplace that discourages complaints, or failing to provide a system by which alleged victims can make complaints. Also, Nassar did not alter the standard that applies to discrimination claims under Title VII. Therefore, plaintiffs may prevail on those claims if they can show that the motive to discriminate was only one of the employer’s motives (as opposed to discrimination).
IS IT THE END OF UNPAID INTERNSHIPS – EVEN IN THE MOVIES?
In many offices, summer is marked by an influx of interns and recent graduates eager to add another bullet point to their resumes. Many legal commentators, however, have speculated that a decision out of the Southern District of New York may mark the demise of this summer ritual.
In Glatt v. Fox Searchlight Pictures, Inc. the Court held thatthe plaintiffs, unpaid interns who worked on the production of Black Swan, were “employees” under both the Fair Labor Standards Act (“FLSA”) and New York Labor Law (“NYLL”) and, therefore, entitled to be paid at least the statutory minimum wage. The Court also cautioned that the “trainee” exception, which excludes certain positions from minimum wage requirements, should be construed narrowly. In determining whether an internship at a for-profit business falls within the “trainee” exception, the Court analyzed six factors set forth in federal Department of Labor guidelines:
The Court emphasized that the plaintiffs should have been provided with an educational experience, meaning “something beyond on-the-job training that employees receive.” In terms of benefits, the Court found that any benefit received by the plaintiffs, such as learning how a production office operates, was “incidental to working in the office like any other employee . . . and not a result of internships intentionally structured to benefit them.”
The Court also acknowledged that while the plaintiffsknew they would not be compensated for their work, the “FLSA does not allow employees to waive their entitlement to wages.” Ultimately, the Court found that the plaintiffs were improperly classified as interns under both the FLSA and NYLL, as they did the work of paid employees.
Lawsuits similar to Glatt have been filed against Charlie Rose, the Hearst Corporation, Conde Nast, and NBC Universal. They are likely to spillover into other industries.
While the increasing number of unpaid internships has sparked concern in recent years, this upswing in class action litigation should cause companies who have not already done so to ensure that their summer and year-round unpaid internship programs are compliant with both state and federal law.
SUPREME COURT RULES A HEIGHTENED CAUSATION STANDARD APPLIES TO TITLE VII RETALIATION CLAIMS
The Supreme Court has ruled that in Title VII retaliation claims, a plaintiff must prove that retaliation was the “but for” cause of the adverse action suffered. Title VII prohibits employer retaliation, i.e. an employer from taking an adverse employment action, “because [an employee] has opposed . . . an unlawful employment practice . . . or . . . made a [Title VII] charge.”
In University of Texas Southwestern Medical Center v. Nassar, Dr. Nassar, a medical doctor of Middle Eastern descent, was employed by the University as a faculty member and as a physician specializing in infectious diseases with Parkland Memorial Hospital. The University and Hospital were affiliated pursuant to an affiliation agreement, which required that the Hospital offer empty staff physician posts to University faculty members. Consequently, most staff physician positions were filled by University faculty members.
Dr. Nassar alleged the University’s Chief of Infectious Disease Medicine, who was his ultimate supervisor, was biased against him because of his ethnic background. Dr. Nassar met with Dr. Fitz, the Chair of Internal Medicine and the Chief’s supervisor, to complain about this alleged bias at different times. Dr. Nassar continued to believe the Chief was biased against him for two years, despite having obtained a promotion with the Chief’s assistance, and began discussions with the Hospital to remain on staff without being a University faculty member. After the Hospital suggested this arrangement was possible, Dr. Nassar resigned from his faculty position, and sent a resignation letter to Dr. Fitz and others, stating that the reason for his resignation was the Chief’s harassment, which he alleged stemmed from “religious, racial, and cultural bias against Arabs and Muslims.” Dr. Fitz felt the letter publicly humiliated the Chief and it was important that the Chief be publicly exonerated.
After learning the Hospital offered Dr. Nassar a staff position, Dr. Fitz told the Hospital that the offer was inconsistent with the affiliation agreement requiring that staff physicians be University faculty members. The Hospital then withdrew Dr. Nassar’s offer. Dr. Nassar alleged that Dr. Fitz’s actions were in retaliation to his opposition to the Chief’s ethnic bias against him.
At trial, Dr. Nassar succeeded on his retaliation claim based on the allegation that his complaints were a “motivating factor” for Dr. Fitz’s interference with his offer from the Hospital. The Fifth Circuit agreed, ruling that a plaintiff need only show that retaliation was a motivating factor for the adverse employment action.
The Supreme Court reversed, finding instead that a plaintiff is required to prove a heightened standard: that the unlawful retaliation would not have occurred absent the employer’s alleged wrongful action or actions. In doing so, the Court recognized that the Title VII provisions containing the “motivating factor” language address only status-based discrimination claims, not retaliation. In a favorable nod to employers, the Supreme Court reasoned that its decision also comported with sound policy as “lessening the causation standard could also contribute to the filing of frivolous claims, which would siphon resources from efforts by employer, administrative agencies, and courts to combat workplace harassment,” recognizing the common situation where an employee, knowing he or she is about to be fired or demoted for poor performance, makes an groundless discrimination claim to try to prevent the change in employment status.
This heightened causation standard will likely aid employers in successfully defending Title VII retaliation claims and potentially lessen the number of retaliation claims filed.