legislation and compliance update: State-Required Disparate Impact

The case pending in a United States District Court in Ohio illustrates some of the difficulties facing employers that use criminal records in making employment decisions. In Waldon v. Cincinnati Public Schools, the Court decided that an employer can be liable for discrimination under Title VII of the 1964 Civil Rights Act simply because it complies with state law. In 2007, the Ohio legislature amended a state law requiring criminal background checks of all current public school employees, including those who had no contact with children. It also mandated the termination of any employee convicted of certain crimes.

The school district terminated ten employees as a result of the new law. Nine of the ten terminated employees were African American. Two of the terminated employees, Gregory Waldon and Eartha Britton sued the school system, alleging disparate impact based on race under federal and state anti-discrimination laws. Mr. Waldon had been convicted of felony assault in 1977 and had been incarcerated for two years. The school system’s district civil service office wrote in support of Mr. Waldon’s parole and offered him employment in 1980. He remained employed by the school system for nearly 30 years without incident before his termination in 2007. Ms. Britton was convicted in 1983 as a go-between in the purchase and sale of $5 worth of marijuana. She had worked for the school system as an instructional assistant for 18 years without incident.

The school system said that “but for the state law” it would not have terminated their employment. Disparate impact occurs when an employment policy is neutral on its face but has a disproportionately negative impact on a protected group. Waldon and Britton claimed that the school system’s action had a disproportionate effect on African Americans. In defense, the school district said it did not discriminate against Waldon or Britton, but rather, it was merely complying with the state law.

The court explicitly rejected this view and endorsed the view expressed in the federal Equal Employment Opportunity Commission’s April 25, 2012 enforcement guidance that Title VII preempts state law that would require an employer to discriminate, including by disparate impact. The court concluded that the state law could not compel the employer to implement the policy, when 90% of the affected employees would be African-American. The court analyzed only whether the school district’s employment practice of complying with state law created a disparate impact. It did not analyze whether the state law itself – that is, as applied to everyone that the law affected at all employers – created a disparate impact.

The court then examined whether the employment practice would qualify under the “business necessity” defense. The courts have ruled that an employer may defend against a disparate impact claim by showing that the challenged practice is “job related for the position in question and consistent with business necessity.”

To prove this defense, the employer must show that the employment practice has a manifest relationship to the employment in question. Factors normally considered to assess business necessity are acceptable risks levels, the nature of the job, the nature of the crime, the severity of the criminal convictions, the amount of time passed since the criminal conviction, and long-term satisfactory employment records. These considerations are consistent with the EEOC’s guidance and case law.

The school district apparently did not itself analyze these factors when it terminated the plaintiffs’ employment. But the court still analyzed whether the school district’s practice of complying with the state law satisfied the business necessity defense. The court concluded that the issue was close enough that it could not decide on a motion to dismiss. Instead, the parties will have to fight out that issue through motions for summary judgment and probably trial.

The case is the first one in which a court consistently applied the logic of the EEOC’s guidance. Employers facing the same problem would be well advised to conduct their own independent analysis of whether a practice of following a specific state law is job-related and consistent with business necessity. The Ohio law is unusual in that it appears to have been far broader than necessary. In a more usual situation, the requirements of state are much more consistent with business necessity. An employer that conducts an analysis and finds a business necessity will be in a much better position to defend its action than the Cincinnati’s schools were.


Source: The Court’s decision to deny the Cincinnati Public Schools’ motion to dismiss is available here:


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Michael Klazema

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Michael Klazema is the lead author and editor for Dallas-based with a focus on human resource and employment screening developments

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