HOW BAN THE BOX, BACKGROUND CHECKS AND
TRENDS ARE CHANGING THE HIRING PROCESS
January 26, 2017
Anaheim, California
Sponsored by Jackson Lewis P.C.
Panelists: Candace M. Harrison and S. Sean
Shahabi
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Panelists
Candace M. Harrison
– Jackson Lewis P.C.
– Partner/[email protected]
S. Sean Shahabi
– Jackson Lewis P.C.
– Partner/[email protected]
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About Jackson Lewis P.C.
National law firm exclusively representing
management in every aspect of employment,
benefits, labor, immigration law and related
litigation
800 attorneys in 57 locations nationwide
Current caseload of over 6,000 litigations
Approximately 800 class actions
Founding member of L&E Global
A leader in educating employers about the laws of
equal opportunity
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More About Jackson Lewis P.C.
 Named the 2017 Employment Law – Management Law Firm of
the Year and ranked in the First Tier nationally in Labor and
Employment Litigation and also in Employment Law and Labor
Law on behalf of Management, in the U.S. News - Best
Lawyers® “Best Law Firms”
 Recommended in U.S. Legal 500 for Labor and Employment
Litigation, Labor-Management Relations and Workplace and
Employment Counseling
 Designated as a Powerhouse in both Complex and Routine
Litigation in the BTI Litigation Outlook 2016: Changes, Trends
and Opportunities for Law Firms
 65 Jackson Lewis attorneys were named Leaders in Their Field
by Chambers USA for 2016; 146 Jackson Lewis attorneys were
selected for inclusion in the 2017 edition of Best Lawyers in
America
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Strategically Located Throughout the
Nation to Serve Employers’ Needs
57 Locations Nationwide*
*Jackson Lewis P.C. is also affiliated with a Hawaii-based
firm
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Agenda
Ban the Box
Arrest and Conviction Records in
Hiring Decisions
Background Checks Including
Limitations on Credit History Checks
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Legal Disclaimer
Jackson Lewis P.C. has prepared the materials
contained in this presentation for the participants’
reference and general information in connection with
education seminars presented by the firm and its
attorneys. Attendees should consult with counsel
before taking any actions that could affect their legal
rights and should not consider these materials or
discussions about these materials to be legal or
other advice regarding any specific matter.
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What Is Ban The Box?
“Ban the Box” – Prevents or limits affected
employers (public and private) from asking job
applicants about their criminal history on the
initial job application
Spreading rapidly across the U.S.
Does not prevent criminal background checks
in the hiring process
Intent to prevent ex-offenders from being
automatically disqualified for employment
based on “The Box” and to provide
consideration based upon individual merit
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Arguments Against
“The Box”
Why Ban the Box?
 Disparate impact concerns
 Decrease job barriers for people with criminal records
 Help the economy and reduce recidivism
 Remove applicants’ fears of rejection
 Provide increased opportunities for those trying to
reintegrate after release from incarceration
According to the National Employment Law Project (NELP),
an estimated 70 million people in the U.S. (nearly 1 in 3 U.S.
adults) have a prior arrest or conviction record and nearly
700,00 people return to our communities from incarceration
every year NELP Research Fact Sheet/August 2016
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Arguments For
“The Box”
Why Keep the Box?
Statutory mandates
Sensitive nature of certain positions
Delay and Efficiency: Why go through full
process if candidate is not qualified?
Company wants to find out as much
information about an applicant as possible
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Where “The Box” Has Been
Banned (in some form)
24 States
 Illinois
 California
 Louisiana
 Colorado
 Maryland
 Connecticut
 Massachusetts
 Delaware
 Minnesota
 Georgia
 Missouri
 Hawaii
 Nebraska
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Where “The Box” Has Been
Banned (in some form)
24 States
 Wisconsin
 New Jersey
Oregon
 New Mexico
Rhode Island
 New York
Tennessee
 Ohio
Vermont
 Oklahoma
Virginia
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Where “The Box” Has Been
Banned
Major U.S. Cities:
 Philadelphia, PA
 Atlanta, GA
 Pittsburgh, PA
 Boston, MA
 Portland, OR
 Charlotte, NC
 San Francisco, CA
 Detroit, MI
 Seattle, WA
 Los Angeles, CA
 St. Louis, MO
 New Orleans, LA
 Rochester, NY
 New York, NY
 Washington, DC
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San Francisco’s Ban The Box Law
The Fair Chance Ordinance
Private sector employers in the city of
San Francisco have to comply with “ban
the box” legislation restricting questions
about applicants’ criminal records on
applications for employment and during
job interviews
Effective August 13, 2014
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San Francisco’s Ban The Box Law
 Also applies to city contractors, subcontractors and leaseholders
 Prohibits asking about arrest or conviction records on a job
application
 Prohibits covered employers from ever considering the following:
 An arrest not leading to a conviction, except for unresolved
arrests
 Participation in a diversion or deferral of judgment program
 A conviction that has been dismissed, expunged, otherwise
invalidated, or inoperative
 A conviction in the juvenile justice system
 An offense other than a felony or misdemeanor (e.g., infraction)
 A conviction that is more than 7 years old (unless the position
being considered supervises minors or dependent adults)
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San Francisco’s Ban The Box Law
Prohibits questions about conviction
history or unresolved arrest until after an
employer has either conducted a live
interview with the applicant, or made a
conditional offer of employment to the
applicant
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San Francisco’s Ban The Box Law
Requires covered employers to:
 Conduct an individualized assessment if the employer
intends to make an employment decision based on an
unresolved arrest or conviction history
 Give the applicant an opportunity to explain or correct
unresolved arrest or conviction history
 Delay any adverse action and reconsider the action if
the applicant provides evidence of rehabilitation,
mitigating circumstances, factors or inaccuracies in the
report
 Inform the applicant if the employer decides to take an
adverse action based on the applicants unresolved
arrest or conviction history
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San Francisco’s Ban The Box Law
 State in all job solicitations/ads that qualified applicants
with arrest/conviction records will be considered for the
position
 Conspicuously post the official notice in every
workplace/jobsite under the employer’s control
 Before taking adverse action based on conviction history or
unresolved arrest, give the individual an opportunity to
present evidence that the information is inaccurate,
individual has been rehabilitated, or other mitigating factors
 Retain accurate records for 3 years
 Allow the Office of Labor Standards Enforcement (OLSE)
reasonable access for monitoring and compliance
 Provide yearly compliance reports to the OLSE
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San Francisco’s Ban The Box Law
 First Violation
 OLSE issues warnings and notices to correct
 OLSE offers the employer guidance on compliance
 Second Violation
 $50 for each individual whose rights were violated or continue
to be violated by the employer
 Subsequent Violations
 $100 for each individual whose rights were violated or continue
to be violated by the employer
 Civil Action Remedies
 reinstatement, back pay, benefits and pay unlawfully withheld,
liquidated damages of $50 per individual for each day that the
individual’s rights were violated, injunctive relief, and
attorneys’ fees and costs
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San Francisco’s Ban The Box Law
Company ABC is based in Australia and
employs 19 people in Australia and 1
person in San Francisco
Does the Ordinance apply to Company
ABC?
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San Francisco’s Ban The Box Law
Yes
The Ordinance applies to employee positions
located within San Francisco, regardless of
where the employer is located, as long as the
position is “in whole, or in substantial part,
within the City”
OLSE interprets “in substantial part” to mean
an average of 8 hours of work performed a
week in San Francisco
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San Francisco’s Ban The Box Law
When an employer uses a temporary
staffing agency, professional employer
organization, or similar entity to employ
people, who is responsible for
compliance – the employer or the staffing
agency?
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San Francisco’s Ban The Box Law
Both the employer and the staffing agency
must comply with the ordinance, and both may
be held responsible for compliance with regard
to particular employees
“Employer” also includes job placement,
referral agencies and other employment
agencies
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San Francisco’s Ban The Box Law
Are employers required to post the OLSE
Notice in languages other than English?
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San Francisco’s Ban The Box Law
Yes
Employers must post the notice in English,
Spanish, Chinese, Tagalog and any other language
spoken by 5% or more of the employees in the
workplace, job site, or other location
OLSE has published translations of the notice in
Chinese, Spanish, and Tagalog on its website
Employers are responsible for providing posters in
any other language spoken by at least 5% of the
employees at the worksite or jobsite
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Significant Take-Away Points
 Remove questions about criminal history from employment
applications
 Revise hiring procedures to delay inquiry about criminal history
until after the first live interview
 Prepare criminal history questions that comply with the ordinance
and include the provided notice
 Establish procedures for considering evidence of rehabilitation
and mitigating factors before making adverse employment
decision
 Prepare compliant pre-adverse action notice
 Revise job advertisements to include required language
 Post required poster
 Retain appropriate documents for at least three years
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Los Angeles Enacts “Ban The
Box” Legislation
 The “Los Angeles Fair Chance Initiative for
Hiring” effective January 22, 2017
 Applies to private employers with at least 10
employees who each perform “at least two
hours of work on average each week within
the geographic boundaries of the City for an
Employer”
 Barred from inquiring about a job applicant’s
criminal history until a conditional offer of
employment has been made
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Los Angeles Enacts “Ban The
Box” Legislation
 Applicant
Any individual who submits an application or other
documentation for employment for work performed
in the City
Full or part time
Contracted work
Contingent work
Work on commission
Temporary or seasonal work
Work through an employment agency
Vocational or education training with or without pay
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Los Angeles Enacts “Ban The
Box” Legislation
 Employer (located or doing business in the City)
 Any individual
 Firm
 Corporation
 Partnership
 Labor organization
 Group of persons
 Association
 Other organization
 Does not apply to the City of Los Angeles or another
local, state or federal government unit
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Los Angeles Enacts “Ban The
Box” Legislation
 Employee “Tom Gruz” is employed by Company 123 on
a part-time basis. He works out of his home office in
Irvine, California. He visits clients who are located in
the City of Los Angeles for approximately 3 hours each
week. Company 123 has nine other part-time
employees who all work at Company 123’s
headquarters in the City of Los Angeles.
 Does the Los Angeles Fair Chance Initiative for Hiring
apply to Company 123?
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Los Angeles Enacts “Ban The
Box” Legislation
Yes
An “employee” means any individual who
performs “at least two hours of work on
average each week” within the geographic
boundaries of the City for an employer
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Los Angeles Enacts “Ban The
Box” Legislation
 Prohibitions
 Asking any question on a job application about an applicant’s
criminal history
 Asking about or requiring disclosure of the applicant’s criminal
history during a job interview
 Independently searching the internet for criminal conviction
information or running a criminal background check before a
conditional offer of employment has been made
 Criminal History Defined
 Information regarding any felony or misdemeanor conviction
from any jurisdiction where person was placed on probation,
fined, imprisoned or paroled
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Los Angeles Enacts “Ban The
Box” Legislation
 Four Common-Sense Exceptions
Employer is required by law to run a criminal
background check on an applicant to obtain
information on an applicant’s conviction
Job sought requires possession or use of a gun
Person convicted of a crime is prohibited by law
from holding the position sought
Employer is prohibited by law from hiring an
applicant who has been convicted of a crime
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Los Angeles Enacts “Ban The
Box” Legislation
 Fair Chance Process
If after making a conditional offer of
employment, the employer inquires into the
applicant’s criminal history and determines
the information warrants an adverse action,
the employer must:
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Los Angeles Enacts “Ban The
Box” Legislation
 Perform a written assessment
 Provide the applicant with written notice (proposed
action, written assessment and other documents
supporting the proposed adverse action)
 Wait at least 5 business days after the applicant is
informed of the proposed adverse action before taking
any adverse action or filling the position
 Consider any information provided by the applicant
and perform a “written reassessment” of the proposed
adverse action and provide copy to the applicant
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Los Angeles Enacts “Ban The
Box” Legislation
 What if my company uses a consumer
reporting agency to conduct criminal
background checks?
Proceed with the Fair Chance Process
concurrently with the pre-adverse and
adverse action requirements of both federal
and state Fair Credit Reporting Act laws
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Los Angeles Enacts “Ban The
Box” Legislation
 Recordkeeping
 Must retain applicants’ employment applications, written
assessment and reassessment for three years
 Notice
 Must state in all job ads and solicitations for employment that
the employer will consider for employment qualified applicants
with criminal histories “in a manner consistent with the
requirements of this Ordinance”
 Posting Requirements
 Must post a notice about the law in a conspicuous place at
every workplace, job site, or other City location under the
employer’s control and visited by applicants
 Copy of notice to appropriate labor unions
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Los Angeles Enacts “Ban The
Box” Legislation
 Civil and Administrative Enforcement
 Individual must report an administrative complaint to the DAA
within one year of the alleged violation before filing civil action
 Beginning July 1, 2017, DAA may fine employers
 First Violation
 Up to $500
 Second Violation
 Up to $1,000
 Third and Subsequent Violations
 Up to $2,000
 Fines for Record-Retention, Notice & Posting Requirements
 Capped at $500 per violation
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Hiring Trends
 Post-offer background checks
 Complete employment and history verification
 Following ban the box developments because it
impacts more than just the inquiry on the
application form
 Making sure not to use outdated forms or
processes
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Significant Take-Away Points
 Assess coverage under all applicable laws/ordinances
 Review and update job advertisements/postings for
compliance
 Review and update job applications and related hiring
forms for compliance
 Provide training to employees who draft job
applications and notices, who conduct job interviews
and who are involved in hiring and personnel decisions
(including document retention)
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Significant Take-Away Points
 Review and update retention policies on hiring and
personnel decisions
 Ensure the staffing agencies/professional employer
organizations your company uses are also in
compliance
 Stay up to date on new laws/requirements
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Hypothetical
 Robert Clowney, Jr. has applied for a position in your
corporate office in Orange County. His qualifications
are great and he is invited in for an interview.
 “Bob” is an honest man and during his interview tells
his interviewer, “Full disclosure…about 20 years ago, I
was a bit of a wild guy. I was arrested for public
intoxication during one of my wildest nights. But I was
a kid back then and am much more responsible now. Is
that an issue?”…
 …“But that’s not all. I got into a little fight a couple of
months back and there is this trial coming up. I’m
totally going to win.”
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Criminal History Inquiries: Prohibitions
An employer cannot ask an applicant to disclose information
regarding:
 An arrest or detention that did not result in conviction (Cal.
Lab. Code §432.7(a)(1))
 Referral to/participation in a pre-trial or post-trial diversion
program (Cal. Lab. Code §432.7(a)(1))
 Convictions which have been sealed, expunged or
otherwise eradicated by statute or court order (Cal. Lab.
Code §432.7(a)(1))
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Criminal History Inquiries: Prohibitions
Arrest, detention…adjudication or court
disposition while person was subject to juvenile
court law (Cal. Lab. Code §432.7(a)(2))
Marijuana convictions more than 2 years old (Cal.
Lab. Code §432.8)
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Criminal History Inquiries: Permissions
 An employer may inquire about pending
criminal charges and arrests for which
the applicant is out on bail or on
his/her own recognizance pending
trial (Cal. Lab. Code §432.7(a))
 Health facilities (as defined under Health and Safety Code
§1250) may inquire as to arrests under Penal Code §290
(relating to sex offenses) if the applicant will have regular
access to patients (Cal. Lab. Code §432.7(f)(1))
 When the position involves access to drugs or medication, the
employer can inquire about arrests under Health and Safety
Code §11590 (requiring registration of controlled substance
offenders) (Cal. Lab. Code §432.7(f)(2))
 Caveats on these last two items where juvenile matters are
involved
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Hypothetical Revisited
 “Full disclosure…about 20 years ago, I was a bit of a
wild guy. I was arrested for public intoxication during
one of my wildest nights. But I was a kid back then and
am much more responsible now. Is that an issue?”…
 …“But that’s not all. I got into a little fight a couple of
months back and there is this trial coming up. I’m
totally going to win.”
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The EEOC and Criminal Background Checks
The EEOC (and Plaintiff’s Bar) are watching
Increasing number of disparate impact claims
A facially neutral policy has a statistically
significant disparate impact on a protected group
Theory: Denying employment on the basis of
criminal records and poor credit histories
adversely affects certain groups
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Who Should Be Concerned?
Employers should be concerned if they use
criminal background checks and:
Use them on a regular basis
Solicit and maintain race, gender, age, disability or
veteran data on applicants — this applies to
government contractors and subcontractors in
particular
Applicant and/or background check data is maintained
by the company or through a vendor
Have a "one size fits all" criminal background check
policy
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EEOC Guidance
On April 25, 2012, the EEOC issued its
"Enforcement Guidance on the Consideration of
Arrest and Conviction Records in Employment
Decisions Under Title VII of the Civil Rights Act of
1964," updating its more than 20 year old guidance
Guidelines outline best practices for considering
the criminal history of a job applicant:
Nature and gravity of the offense
Time that has lapsed since the offense
Nature of the job
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EEOC Guidance
 92% of employers use criminal background checks
 EEOC: Is process job-related, consistent with business
necessity?
 Targeted screens: i.e. nature of crime, time elapsed,
nature of job
 Individualized assessment = a dialogue
 Convictions: Discourages employers from using
blanket exclusions of individuals who have been
convicted of crimes
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EEOC Background/Credit Checks:
Do’s and Don’ts
EEOC Requirements:
Require uniformity for all applicants or all applicants
for a specific position
Can't use background check information to
discriminate based on any protected trait
Avoid disparate treatment
 Uniform policy of rejecting all applicants with a certain type
of conviction might exclude more applicants of a particular
race, national origin or other protected trait
Retain background check info for one year of receipt or
hire/no hire decision, if longer
If charge of discrimination filed, must retain until case
is concluded
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The Individualized Assessment
Targeted Screens + Individualized Assessment =
Best Practice:
EEOC Guidance indicates a preference for a targeted
screen accompanied by notice to the individual under
scrutiny and an individualized assessment of the
individual and the crime and the position in question
The Guidance lists nine possible topics of
consideration in an individualized assessment, all
of which generally require a dialogue
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Individualized Assessment
 Accuracy of criminal record
 Facts and circumstances surrounding the offense
 Number of offenses for which the individual was convicted
 Age at time of conviction or release from prison
 Evidence that the individual performed the same type of work,
post-conviction, with the same or a different employer, without
incidents of criminal conduct
 Length & consistency of employment history before/after offense
 Rehabilitation efforts, e.g., education/training
 Employment or character references and other information
regarding fitness for the position
 Whether the individual is bonded
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Best Practices
 Targeted Screens: use different standards for different
positions
 Avoid policies that indicate automatic exclusions,
instead, “Acme Corp. believes the following crimes are
job related - applicants with these offenses will be
subject to individualized assessment”
 Engage in individualized assessment and dialogue
whenever possible
 Train HR and decision makers to avoid reliance on hard
and fast rules - such reliance jeopardizes ability to
demonstrate use of individualized assessment
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Significant Take-Away Points
Always consider whether there are state
or city restrictions or prohibitions
Consider the EEOC guidelines
Avoid blanket policies and practices
Consider each situation on a case-bycase basis
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Basics of Employment
Background Checks
Key Considerations:
 Federal (Fair Credit Reporting Act) and California
(Investigative Consumer Reporting Agency) may apply
 Generally comes into play with investigative consumer
reports prepared by third parties
 What is required:
Certain disclosures
Pre-adverse action notices
 Under ICRA, failure to comply can result in liability for
actual damages or $10,000, whichever is greater
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Basics of Background Checks
FCRA/ICRA
 An investigative consumer report is generally defined as a
consumer report that contains information on a consumer’s:
 Character
 General reputation
 Personal characteristics or
 Mode of living
 Prepared by an investigative consumer reporting agency for
employment purposes
 “Employment purposes” is defined as evaluating a consumer for
 Employment
 Promotion
 Reassignment or retention as an employee
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Basics of Background Checks
California Rules
California law distinguishes between a
consumer credit report and an investigative
consumer report
A consumer credit report is defined in pertinent
part as any written, oral or other
communication bearing on a consumer’s credit
worthiness, credit standing or credit capacity
by a consumer reporting agency to be used for
employment purposes
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Basics of Background Checks
California Rules
Consumers must be provided with the internet
website address or telephone number of the
investigative consumer reporting agency where
they may find additional information about the
agency’s privacy practices
Disclosure must describe the nature and scope
of the requested report
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Basics of Background Checks
California Rules
The Disclosure must include a summary of
inspection rights under CA Civil Code section
1786.22
Check the box requirement to receive a copy of
the report
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Basics of Background Checks
Limitations on Credit Reports/California Labor
Code section 1024.5
 Credit reports may only be obtained on applicants or
employees for the following categories:
Positions with the state Department of Justice
Managerial positions, i.e., employees who qualify for
the “executive exemption” under California wage
and hour law
Sworn peace officers or other law enforcement
personnel
Positions where the information sought in the credit
report must be revealed by law
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Basics of Background Checks
Positions that involve regular access to the personal
information of others (i.e., bank or credit card
account information, social security numbers, dates
of birth), other than the regular solicitation of credit
card applications at a retail establishment
Positions requiring the employee to be a named
signatory on the employer’s bank or credit card or
otherwise authorized to enter into financial contracts
on behalf of the employer
Positions involving access to confidential or
proprietary information of the employer
Positions that involve regular access to $10,000 or
more of cash
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Significant Take-Away Points
The proverbial “ounce of prevention” is an
employer’s best defense
Having clear and compliant written policies
Training personnel to follow the written policies
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Questions
Candace M. Harrison
– Jackson Lewis P.C.
– Partner/[email protected]
S. Sean Shahabi
– Jackson Lewis P.C.
– Partner/[email protected]
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13th Annual In-House Counsel Conference
January 26, 2017 (Anaheim, CA)
www.acc.com/chapters/socal/
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