Compliance and Legislation Update - The EEOC and Me

A few years ago, had you asked the average businessman his personal philosophy on background screening, his response would’ve likely been something to the effect of “better safe than sorry.” Better to screen every applicant, to eliminate any applicant with a blemish on their record, than to face a due diligence lawsuit.

Now that opinion is changing. By taking “better safe than sorry” truly to heart, businesses have started to run afoul of the Equal Employment Opportunity Commission (EEOC). According to the EEOC, making employment decisions (specifically hiring or retention decisions) based on arrest and convictions or on credit reports has a disparate impact on minorities.

The EEOC has also determined that they would generally analyze the following items to determine if a hiring/retention decision was a business necessity or if it was discriminatory:

These two differing opinions have put many businesses between a rock and a hard place. Businesses can’t stop doing background checks completely without opening themselves to due diligence lawsuits but to continue in the vein of running all checks on everyone opens the business to discrimination lawsuits.

Ideally, in order to avoid the potential lawsuits, each company would do the following:

What it comes down to is that each job class has a different risk profile and because of that, not each job class can be treated the same. The possible risks need to be carefully weighed for each class and policies need to be updated to reflect these risks.

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