Defense Act Sneaks Ban-The-Box Legislation onto Federal Contractors

Just before its holiday break, Congress surprisingly passed the Fair Chance Act with the National Defense Authorization Act on December 20, 2019, and it will become effective on December 20, 2021 [two years after its effective date].  Section 1123 of the NDAA created new 41 U.S.C. §4714, which will prohibit federal contractors from seeking criminal background histories until after a conditional job offer has been extended, except where the applicant will have access to classified, law enforcement or national security information,  when "consideration of criminal history record information prior to a conditional offer with respect to the position is otherwise required by law," or when the job is exempted by regulations to be issued by the GSA prior April 21, 2021.  However, the FCA only applies to jobs which perform work related to the federal contract at issue (as opposed to the contractor’s other employees).   This is becoming a common occurrence to use the Defense Authorization Act to sneak in controversial employment laws.  

In particular, under §4714(a)(1)(B), the contracting executive federal agency:

shall require, as a condition of receiving a Federal contract and receiving payments under such contract that the contractor may not verbally, or through written form, request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before the contractor extends a conditional offer to the applicant.

At present, this legislation raises more questions than it answers.  When is a criminal background check required “by law”?  Federal law?  State law (which the EEOC has never recognized as relevant in a discrimination analysis)? By common law (i.e., the law of negligent hiring)?  Why is access to cash, financial information, children or disabled adults not similarly protected when a run-of-the-mile criminal is more likely to seek cash or deviance than national security information?  Granted, the FCA directs the GSA in preparing the governing regulations to "giv[e] due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions."    How will this interact with the ADA’s similar requirement that medical information cannot be requested until a conditional job offer has been extended?  What jobs will be considered as “related to the work” of the federal contract?   Hopefully, these and other questions will be addressed with the implementing regulations or remedied by subsequent legislation.    

The complete §4714 will read as follows:

SEC. 1123. PROHIBITION ON CRIMINAL HISTORY INQUIRIES BY CONTRACTORS PRIOR TO CONDITIONAL OFFER. (a) CIVILIAN AGENCY CONTRACTS.— (1) IN GENERAL.—Chapter 47 of title 41, United States Code, is amended by adding at the end the following new section: ‘‘§4714. Prohibition on criminal history inquiries by contractors prior to conditional offer 

(a) LIMITATION ON CRIMINAL HISTORY INQUIRIES.— ‘‘(1) IN GENERAL.—Except as provided in paragraphs (2) and (3), an executive agency— 

(A) may not require that an individual or sole proprietor who submits a bid for a contract to disclose criminal history record information regarding that individual or sole proprietor before determining the apparent awardee; and

(B) shall require, as a condition of receiving a Federal contract and receiving payments under such contract that the contractor may not verbally, or through written form, request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before the contractor extends a conditional offer to the applicant. 

(2) OTHERWISE REQUIRED BY LAW.—The prohibition under paragraph (1) does not apply with respect to a contract if consideration of criminal history record information prior to a conditional offer with respect to the position is otherwise required by law. 

(3) EXCEPTION FOR CERTAIN POSITIONS.— 

(A) IN GENERAL.—The prohibition under paragraph (1) does not apply with respect to— ‘‘(i) a contract that requires an individual hired under the contract to access classified information or to have sensitive law enforcement or national security duties; or ‘‘(ii) a position that the Administrator of General Services identifies under the regulations issued under subparagraph (B). 

(B) REGULATIONS.— 

(i) ISSUANCE.—Not later than 16 months after the date of enactment of the Fair Chance to Compete for Jobs Act of 2019, the Administrator of General Services, in consultation with the Secretary of Defense, shall issue regulations identifying additional positions with respect to which the prohibition under paragraph (1) shall not apply, giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions. 

(ii) COMPLIANCE WITH CIVIL RIGHTS LAWS.—The regulations issued under clause (i) shall— ‘‘(I) be consistent with, and in no way supersede, restrict, or limit the application of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) or other relevant Federal civil rights laws; and ‘‘(II) ensure that all hiring activities conducted pursuant to the regulations are conducted in a manner consistent with relevant Federal civil rights laws. 

(b) COMPLAINT PROCEDURES.—The Administrator of General Services shall establish and publish procedures under which an applicant for a position with a Federal contractor may submit to the Administrator a complaint, or any other information, relating to compliance by the contractor with subsection (a)(1)(B). 

(c) ACTION FOR VIOLATIONS OF PROHIBITION ON CRIMINAL HISTORY INQUIRIES.— ‘‘(1) FIRST VIOLATION.—If the head of an executive agency determines that a contractor has violated subsection (a)(1)(B), such head shall— ‘‘(A) notify the contractor; ‘‘(B) provide 30 days after such notification for the contractor to appeal the determination; and ‘‘(C) issue a written warning to the contractor that includes a description of the violation and the additional remedies that may apply for subsequent violations.

‘‘(2) SUBSEQUENT VIOLATION.—If the head of an executive agency determines that a contractor that was subject to paragraph (1) has committed a subsequent violation of subsection (a)(1)(B), such head shall notify the contractor, shall provide 30 days after such notification for the contractor to appeal the determination, and, in consultation with the relevant Federal agencies, may take actions, depending on the severity of the infraction and the contractor’s history of violations, including— ‘‘(A) providing written guidance to the contractor that the contractor’s eligibility for contracts requires compliance with this section; ‘‘(B) requiring that the contractor respond within 30 days affirming that the contractor is taking steps to comply with this section; and ‘‘(C) suspending payment under the contract for which the applicant was being considered until the contractor demonstrates compliance with this section. 

(d) DEFINITIONS.—In this section: 

(1) CONDITIONAL OFFER.—The term ‘conditional offer’ means an offer of employment for a position related to work under a contract that is conditioned upon the results of a criminal history inquiry. 

(2) CRIMINAL HISTORY RECORD INFORMATION.—The term ‘criminal history record information’ has the meaning given that term in section 9201 of title 5.

(2) CLERICAL AMENDMENT.—The table of sections for chapter 47 of title 41, United States Code, is amended by adding at the end the following new item: ‘‘4714. Prohibition on criminal history inquiries by contractors prior to conditional offer.’’

(3) EFFECTIVE DATE.—Section 4714 of title 41, United States Code, as added by paragraph (1), shall apply with respect to contracts awarded pursuant to solicitations issued after the effective date described in section 1122(b)(2) of this subtitle.  [That section, in turn, provided:

 (2) EFFECTIVE DATE.—Section 9202 of title 5, United States Code (as added by this subtitle), shall take effect on the date that is 2 years after the date of enactment of this subtitle. 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.