Franklin County Appellate Court Rejects Discrimination Claims Based on Criminal Conviction and Non-Substantially Limiting Impairments

[Editor's Note:  On August 3, 2023, the Court deleted its original opinion and re-issued it after a request for reconsideration on the issue (noted below) about whether a request for a reasonable accommodation may constitute protected activity for purposes of a retaliation claim.  Without resolving that issue, the Court deleted the paragraph discussing that issue (as noted below) and modified the opinion, but not the result: " In light of appellant’s reconsideration motion and the accompanying amicus brief filed with this court, we reissue our June 20, 2023 decision without original paragraph 102 and with a slight modification to original paragraph 103 (now 102). Whether a request for accommodation constitutes protected activity under Ohio law is a question that warrants full briefing before definitive resolution by this court."]

Last month, a unanimous Franklin County Court of Appeals affirmed an employer’s summary judgment where the plaintiff had alleged that he had been terminated on account of his race, disability and in retaliation for engaging in protected conduct.  Childs v. Kroger Co., 2023-Ohio-2034.  The plaintiff had been hired into a bargaining unit position despite a murder conviction from when he was a juvenile and was ultimately promoted to a salaried assistant manager position before he was fired when management learned about his prior murder conviction.  The Court found that he was unqualified for his position because the company policy at the time of his termination precluded the employment of convicted murderers.

According to the Court’s opinion, the plaintiff was convicted of murder in 1996 from when he was a juvenile.  He was hired by Kroger into an hourly bargaining unit position in 2014.  He had truthfully reported that he had a criminal conviction on his employment application and claimed to have explained the details to his interviewer.  The background check only reviewed the prior 7 years and so did not pick up the earlier murder conviction.   His job history listed his prison employment as well as his current job.  It apparently did not occur to the individuals reviewing his job application that his prison employment was as a prisoner instead of as a private contractor.  In 2015, he applied for and was selected for a management training position.  In 2017, he began suffering panic attacks after the store was robbed and he was physically threatened.  He was given a poor performance evaluation a couple of months later and put on a performance plan.  He then accused his manager a few months later of being racist based on observed favoritism.  A month later, he then submitted a medical statement about his depression and asked to be transferred to another store.  He then complained again in October 2017 about his manager, who was then transferred.  The plaintiff was also transferred from Reynoldsburg to Sunbury in February 2018 and he received a better performance evaluation.

While in Sunbury, the plaintiff learned in April 2018 that an employee had been convicted as a sexual offender.  He recommended termination and participated in the union grievance process that resulted in the employee’s termination as a risk to minor employees.  Shortly thereafter, an employee was searching for information about the plaintiff’s recent motorcycle accident and discovered his 1996 murder conviction.  It was reported to management and he was fired at the end of May 2018 because company policy provided that it was a disqualifying offense.  More than a year later, the plaintiff filed suit alleging race and disability discrimination and retaliation and wrongful discharge in violation of public policy, as well as unlawful aiding and abetting and defamation.  The trial court eventually granted summary judgment to the defendants on all claims and it was affirmed on appeal.  Much of the lengthy appellate decision involves procedural and discovery issues.

The Court concluded that, despite the fact that the plaintiff had worked more than three years at Kroger and been promoted, he could not satisfy his prima facie case and show that he was qualified for his position before being fired because his 1996 murder conviction rendered him unqualified.  The plaintiff “is unable to establish the third element of his prima facie case, because his murder conviction rendered him unqualified for employment at Kroger.” Evidence was presented that the company refused to hire individuals with certain convictions and fired them if a disqualifying conviction was later discovered.   Even if murder was not a disqualifying conviction at the time he was hired, it was at the time he was terminated.

The Court also rejected his claim for disability discrimination, which was based on his depression, anxiety and PTSD.  The Court found that the plaintiff failed to show that his depression substantially limited any major life activities because he admitted that he was able to continue to work and the remaining limitations were relatively insignificant.  Although the plaintiff

 indicated that his depression impacted his ability to sleep and do household chores on some days, he did not claim that his depression affected his ability to sleep or do chores for significant amounts of time. [The plaintiff] presented no evidence indicating that his depression substantially limited his ability to think or otherwise engage in major life activities, and he affirmed that he could hold a job despite his depression. Accordingly, [he] failed to demonstrate that his depression occurred in sufficient duration and with sufficient severity to significantly limit any major life activity.

In any event, even if the plaintiff could show that he were statutorily disabled, he “also could not establish that he was qualified for his assistant store manager position either with or without a reasonable accommodation, because his murder conviction rendered him unqualified for any position of employment with Kroger.”

As for his retaliation claim, the Court initially rejected his argument that he was retaliated against for requesting a transfer as a reasonable accommodation. “A request for reasonable accommodation does not amount to “participation in any manner in any investigation, proceeding, or hearing” or “opposition to an unlawful discriminatory practice” under R.C. 4112.02(I).” In other words, Ohio law does not consider a reasonable accommodation request to be protected activity for purposes of asserting a retaliation claim.  However, the Court withdrew that part of its opinion on August 3, 2023 as noted in the Editor's Note above. 

Similarly, the Court concluded that it was not protected conduct under ORC 4112 to report the sexual offender conviction of a subordinate to management when he asserted that his termination was motivated by reporting the sexual offender despite the store manager’s resistance.

Nonetheless, his other retaliation claim had more merit.  He claimed that he was placed on a performance improvement plan after asking his supervisor if he was racially biased against him.  However, the company contended that it was based on his earlier, year-end performance evaluation.  Sadly for the plaintiff, his own comments on his performance evaluation acknowledged that his performance needed to improve and commented on specific mistakes or shortcomings that he had shown.  He also could not disprove that the company always placed low-performing employees on performance plans.  Therefore, the Court dismissed the retaliation claim.

Because all of his ORC 4112 claims were dismissed, the aiding and abetting allegations against the individual employees and managers were similarly dismissed.

The Court also dismissed the wrongful discharge claim on the basis that his murder conviction motivated his termination and not his earlier report of the sex offender employee.  He could not show that public policy was jeopardized by his reporting of the sex offender to management.  Even if that report had motivated his termination, he could not identify a public policy which was violated by his termination:

[His] termination would not have jeopardized the public policy expressed in R.C. 2950.034(A). The statute prohibits sexually oriented offenders from residing in specific locations; it does not prohibit sexually oriented offenders from working at specific locations.

Finally, the Court dismissed the defamation claim based on the incorrect report that he had failed to previously disclose his murder conviction.  He claimed – without contradiction – that he had disclosed it in his job interview.  However, he could not prove that the HR employee passed that information along to management or that the individuals who allegedly defamed him knew that he had previously disclosed it in a 2014 interview.   Further, management has a qualified privilege to discuss other employees.

Furthermore, “ ‘a communication made in good faith on a matter of common interest between an employer and an employee, or between two employees concerning a third employee, is protected by qualified privilege.’ ” . . . “Once the defense of qualified privilege attaches, a plaintiff can only defeat the privilege with clear and convincing evidence that the defendant made the statements at issue with actual malice.”

Ms. Gray and Mr. Shepard were both managers at Kroger, and their communication regarding [the plaintiff’s] failure to disclose his murder conviction was a matter of common business interest between them. As such, Ms. Gray’s statement to Mr. Shepard was subject to a qualified privilege. Because the evidence demonstrates that [he] failed to disclose his murder conviction to Kroger [in writing], Mr. Childs cannot establish that Ms. Gray made her statement to Mr. Shepard with actual malice.

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.

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.

Sixth Circuit Finds FCRA Liability Which Affected Mis-Identified Employee

Last week, the Sixth Circuit partially reversed a defense judgment in a Fair Credit Reporting Act case where the consumer reporting agency mistakenly mis-identified the plaintiff as having a criminal fraud record when it should have realized based on his credit check that he did not.   Smith v. LexisNexis Screening  Solutions, Inc., No. 15-2329 (6^th Cir. Sept 13, 2016).  The plaintiff lost six weeks of wages while straightening out the mistake.  A jury awarded him $75,000 in compensatory damages and $300,000 in punitive damages. The Court found that while there may have been negligence, the defendant’s actions were not sufficiently willful to support punitive damages.  While this is not an employee-employer case, employers and employees should both be interested in how the FCRA works in this case. 

According to the Court's opinion, the plaintiff has a common name, David Alan Smith.  A company bought his employer and required all of the employees to re-apply for jobs with the new company.  The plaintiff was offered a lower paying job than his former position, subject to passing a background check.  He authorized the release of his full name, social security number, birth date, address, phone number, driver’s license number and sex, but the employer did not provide his middle name or initial.   The credit check came back clean under David A.  Smith, but a criminal conviction for David O. Smith came up under his first and last name and birthdate.  No one apparently noticed the discrepancy.  The plaintiff’s employment application was then revoked on December 12 and he was directed to address any correction issue to the defendant company, which corrected its mistake and notified the employer and him on January 11. The defendant showed that it runs over 10 million checks each year and 98.8% of them are never disputed.  The plaintiff was then rehired on January 29.   Needless to say, he had a joyless holiday that year and had become very depressed.  He ultimately sued the consumer reporting agency.

The jury found that the defendant’s failure to require the plaintiff’s middle initial when running the check and failing to notice the discrepancy between its own criminal and credit checks could be negligent and willful violations of the Act.   The court also found sufficient evidence of economic and emotional harm.  The jury initially returned punitive damages of $300,000, but the trial court reduced those to $150,000.

The Sixth Circuit agreed that there was sufficient evidence of negligence in this case.  The Fair Credit Reporting Act at “15 U.S.C. § 1681e(b) mandates that CRAs “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.”  In this case, the evidence showed that David Smith is an extremely common name, with over 125,000 such individuals living in the U.S. alone.   A prudent agency when confronted with an extremely common name should have required a middle name to improve the accuracy of its results.  Indeed, the defendant had a field to insert a middle name, but did not make it mandatory.

There was also some evidence of negligence from the fact that the Equifax credit report identified David A. Smith and the criminal record referred to David Oscar Smith.  

A failure to cross-reference such information, standing alone, might not have any bearing on whether a CRA’s actions were reasonable.  . . . In this case, however, the fact that Lexis possessed a report with Smith’s middle initial serves as additional evidence supporting the jury’s finding as to negligence.

Although the defendant may have been negligent, it does not follow that it was also willful.  “In order to willfully violate the FCRA, a CRA’s action must entail “an unjustifiably high risk of harm that is either known or so obvious that it should be known.”  The defendant obviously had taken steps (such as requiring birth dates, social security numbers, etc.)  to ensure a high degree of accuracy and could point to the fact that less than 1% of its checks were ever disputed. “Furthermore, a single inaccuracy, without more, does not constitute a willful violation of the FCRA. . . . Although this inaccuracy might have resulted from Lexis’s carelessness, it did not result from Lexis’s disregarding a high risk of harm of which it should have known.”  Accordingly, the Court ruled that punitive damages were inappropriate.

The Court affirmed the compensatory damages award of $75,000 from the defendant’s negligent error: “This situation, and particularly the financial hardships involved in it, is one with which reasonable jurors could identify and infer that a reasonable person in the same situation would suffer emotional distress.”  It rejected the defendant’s efforts to limit the amount of the judgment based on the short time (i.e., six weeks) that the plaintiff was unemployed or the four weeks that it took the defendant to correct the mistake.

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 be changed or 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.

New Developments in Ohio Negligent Hiring Claims

On June 26, 2012, Governor Kasich signed Senate Bill 337, which, among other things, reduced collateral sanctions for convicted felons. What has not been well publicized is that it also contains a provision – to be codified at O.R.C. § 2953.25(G) -- granting employers immunity from civil claims for negligent hiring and retention in certain circumstances. One of the primary features of the legislation is that it permits eligible offenders (who have successfully completed incarceration and parole) to obtain a Certificate of Qualification for Employment. An employer which relies on this Certificate in hiring and retaining an eligible offender is immune from civil liability for negligent hiring claims involving that offender and may use it as evidence of its due care in hiring, retaining, licensing, leasing, or admitting that individual in any other negligence claims or administrative proceedings. Of course, the employer loses that immunity if it continues to employ the individual after gaining actual knowledge that the employee subsequently demonstrates “dangerousness” or is convicted or pleads guilty to a felony. The Department of Corrections has until the end of September to create a process for issuing Certificates (including creating the form of the Certificate) and must report back to the Governor and the General Assembly about what industries are hiring eligible offenders and their recidivism rates. The statute is scheduled to take effect in late September 2012, after the Department creates the necessary process and form of certificate and issues governing rules under R.C. 119 to implement and operate the legislation.

The legislation provides in relevant part as follows:

Sec. 2953.25.

. . .

(G)(1) In a judicial or administrative proceeding alleging negligence or other fault, a certificate of qualification for employment issued to an individual under this section may be introduced as evidence of a person's due care in hiring, retaining, licensing, leasing to, admitting to a school or program, or otherwise transacting business or engaging in activity with the individual to whom the certificate of qualification for employment was issued if the person knew of the certificate at the time of the alleged negligence or other fault.

(2) In any proceeding on a claim against an employer for negligent hiring, a certificate of qualification for employment issued to an individual under this section shall provide immunity for the employer as to the claim if the employer knew of the certificate at the time of the alleged negligence.

(3) If an employer hires an individual who has been issued a certificate of qualification for employment under this section, if the individual, after being hired, subsequently demonstrates dangerousness or is convicted of or pleads guilty to a felony, and if the employer retains the individual as an employee after the demonstration of dangerousness or the conviction or guilty plea, the employer may be held liable in a civil action that is based on or relates to the retention of the individual as an employee only if it is proved by a preponderance of the evidence that the person having hiring and firing responsibility for the employer had actual knowledge that the employee was dangerous or had been convicted of or pleaded guilty to the felony and was willful in retaining the individual as an employee after the demonstration of dangerousness or the conviction or guilty plea of which the person has actual knowledge.

(H) A certificate of qualification for employment issued under this section shall be presumptively revoked if the individual to whom the certificate of qualification for employment was issued is convicted of or pleads guilty to a felony offense committed subsequent to the issuance of the certificate of qualification for employment.

(J) Not later than ninety days after the effective date of this section, the division of parole and community services shall adopt rules in accordance with Chapter 119 of the Revised Code for the implementation and administration of this section and shall prescribe the form for the petition to be used under division (B)(1) or (2) of this section. The form for the petition shall include places for all of the information specified in division (F) of this section. Upon the adoption of the rules, the provisions of divisions (A) to (I) of this section become operative.

(K) The department of rehabilitation and correction shall conduct a study to determine the manner for transferring the mechanism for the issuance of a certificate of qualification for employment created by this section to an electronic database established and maintained by the department. The database to which the mechanism is to be transferred shall include granted certificates and revoked certificates and shall be designed to track the number of certificates granted and revoked, the industries, occupations, and professions with respect to which the certificates have been most applicable, the types of employers that have accepted the certificates, and the recidivism rates of individuals who have been issued the certificates.

Not later than the date that is one year after the effective date of this section, the department of rehabilitation and correction shall submit to the general assembly and the governor a report that contains the results of the study and recommendations for transferring the mechanism for the issuance of certificate of qualification for employment created by this section to an electronic database established and maintained by the department.

(L) The department of rehabilitation and correction, in conjunction with the Ohio judicial conference, shall conduct a study to determine whether the application process for certificates of qualification for employment created by this section is feasible based upon the caseload capacity of the department and the courts of common pleas. Not later than the date that is one year after the effective date of this section, the department shall submit to the general assembly a report that contains the results of the study and any recommendations for improvement of the application process.

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.

EEOC Issues New Enforcement Guidance on Employer Consideration of Criminal Records in Employment

Yesterday, the EEOC issued Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act, which restates in more detail the position it has held for a few decades concerning arrest records. Exclusion of applicants based solely on a record of being arrested has an unlawful disparate impact on African-American men without being job related because a mere arrest is not determinative of guilt or proof criminal conduct. In addition, the EEOC now indicates that exclusion of applicants for a criminal conviction may have a similar disparate impact unless the employer can show that it complied with the Uniform Guidelines on Employee Selection Procedures, that the employer always considers “the nature of the crime, the time elapsed, and the nature of the job” (and often conducts an “individualized assessment” which involves discussing the issue with the individual) or that the employer is complying with another federal statute or regulation that conflicts with Title VII. “A covered employer is liable for violating Title VII when the plaintiff demonstrates that the employer’s neutral policy or practice has the effect of disproportionately screening out a Title VII-protected group and the employer fails to demonstrate that the policy or practice is job related for the position in question and consistent with business necessity.”

At the heart of the EEOC’s position are the following statistics, some of which is from a Pew Center Report:

Arrest and incarceration rates are particularly high for African American and Hispanic men. African Americans and Hispanics are arrested at a rate that is 2 to 3 times their proportion of the general population. Assuming that current incarceration rates remain unchanged, about 1 in 17 White men are expected to serve time in prison during their lifetime by contrast, this rate climbs to 1 in 6 for Hispanic men; and to 1 in 3 for African American men.

. . .

Simply stated, incarceration in America is concentrated among African American men. While 1 in every 87 white males ages 18 to 64 is incarcerated and the number for similarly-aged Hispanic males is 1 in 36, for black men it is 1 in 12.”). Incarceration rates are even starker for 20-to-34-year-old men without a high school diploma or GED: 1 in 8 White males in this demographic group is incarcerated, compared to 1 in 14 Hispanic males, and 1 in 3 Black males.

. . . .

Based on a state-by-state examination of incarceration rates in 2005, African Americans were incarcerated at a rate 5.6 times higher than Whites, and 7 states had a Black-to-White ratio of incarceration that was 10 to1. In 2010, Black men had an imprisonment rate that was nearly 7 times higher than White men and almost 3 times higher than Hispanic men.

In addition, the EEOC also expresses a concern of which many of us who regularly work in this area are aware: public criminal records are often incomplete and sometimes even inaccurate. (This has often led to me helping a client track down the disposition of arrests and charges through court and other records to confirm information provided by the applicant and/or employee).

Recent studies have found that a significant number of state and federal criminal record databases include incomplete criminal records.

• A 2011 study by the DOJ/BJS reported that, as of 2010, many state criminal history record repositories still had not recorded the final dispositions for a significant number of arrests.

• A 2006 study by the DOJ/BJS found that only 50% of arrest records in the FBI’s III database were associated with a final disposition.

Additionally, reports have documented that criminal records may be inaccurate.

. . . . Another report found that criminal background checks may produce inaccurate results because criminal records may lack “unique” information or because of “misspellings, clerical errors or intentionally inaccurate identification information provided by search subjects who wish to avoid discovery of their prior criminal activities.”

One study cited by the EEOC and conducted by the Department of Justice found “that in a sample of 82,601 employment applicants, 4,562 of these individuals were inaccurately indicated by a “name check” to have criminal records, which represents approximately 5.5% of the overall sample.”

It is troubling that the EEOC seems to imply that the guilt of the convicted individual is irrelevant to its disparate impact analysis and that conviction records are more indicative of racism than a legal determination of guilt beyond a reasonable doubt upon which an employer is entitled to rely. Nonetheless, it recognizes that “record of a conviction will usually serve as sufficient evidence that a person engaged in particular conduct, given the procedural safeguards associated with trials and guilty pleas.” However, it “recommends” that employers stop asking about criminal convictions on job applications and reserve this inquiry to the latter stages of the employment process based on the possibility that criminal records will be inaccurate and fail to reflect, among other things, expungements. Moreover, it also recommends (but does not require in all circumstances) that the employer conduct an “individualized assessment” of the circumstances surrounding the conviction, such as “notice to the individual that he has been screened out because of a criminal conviction; an opportunity for the individual to demonstrate that the exclusion should not be applied due to his particular circumstances; and consideration by the employer as to whether the additional information provided by the individual warrants an exception to the exclusion and shows that the policy as applied is not job related and consistent with business necessity.”

In addition, the EEOC cites a 1975 Eighth Circuit decision finding that a blanket exclusion of anyone convicted of any crime violated Title VII and implies that a 2007 summary judgment -- for a Third Circuit employer which excluded as paratransit drivers anyone convicted of a violent felony -- was sustainable only because of statistical evidence which the employer produced concerning recidivism. If the EEOC finds that an employer is excluding candidates based on a criminal conviction, it may consider that exclusion – and the employer’s reputation for excluding convicted criminals -- to violate Title VII.

An employer’s evidence of a racially balanced workforce will not be enough to disprove disparate impact. In Connecticut v. Teal, the Supreme Court held that a “bottom line” racial balance in the workforce does not preclude employees from establishing a prima facie case of disparate impact; nor does it provide employers with a defense. The issue is whether the policy or practice deprives a disproportionate number of Title VII-protected individuals of employment opportunities.

. . . . , in determining disparate impact, the Commission will assess the probative value of an employer’s applicant data. As the Supreme Court stated in Dothard v. Rawlinson, an employer’s “application process might itself not adequately reflect the actual potential applicant pool since otherwise qualified people might be discouraged from applying” because of an alleged discriminatory policy or practice. Therefore, the Commission will closely consider whether an employer has a reputation in the community for excluding individuals with criminal records. Relevant evidence may come from ex-offender employment programs, individual testimony, employer statements, evidence of employer recruitment practices, or publicly posted notices, among other sources. The Commission will determine the persuasiveness of such evidence on a case-by-case basis. (italics added for emphasis).

. . . .

[Even where an employer shows that its policy and practice is job related and consistent with business necessity], a Title VII plaintiff may still prevail by demonstrating that there is a less discriminatory “alternative employment practice” that serves the employer’s legitimate goals as effectively as the challenged practice but that the employer refused to adopt.

The EEOC asserts that many “targeted exclusions” – “an employer policy or practice of excluding individuals from particular positions for specified criminal conduct within a defined time period” -- are likely to survive a disparate treatment analysis (even in the absence of a validation study concerning recidivism or a federal statute providing a safe harbor). Moreover, although not always necessary to survive a disparate treatment challenge, the EEOC also advocates an “individualized assessment,” ( i.e., where “ an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity”). Among other things, an individualized assessment may reveal the existence of an error in the criminal record.

What will be troublesome for most employers is that the EEOC does not consider compliance with a state statute or local ordinance that requires the exclusion of certain individuals who have been convicted of certain crimes to be a defense to potential Title VII liability. Of course, if the EEOC finds that the exclusion required by the statute or ordinance to be reasonably targeted, job related and consistent with business necessity, it may not challenge the employer’s compliance with it.

Although the EEOC does not believe that an arrest record by itself should exclude anyone from employment, it recognizes that “[a]n arrest, however, may in some circumstances trigger an inquiry into whether the conduct underlying the arrest justifies an adverse employment action.” As an example, the EEOC discusses a situation where a school employee is accused of inappropriate sexual contact with children. The School may conduct its own investigation following the employee’s arrest and terminate the employee based on its own conclusions and policies regardless of whether the employee is charged or convicted (based on a guilt beyond a reasonable doubt standard).

In light of the EEOC’s new enforcement guidance, employers should examine their employment policies concerning background checks.

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.

Franklin County Court of Appeals Holds Employee Responsible for “Possible Hit” in Background Check

Last week, a unanimous Franklin County Court of Appeals affirmed the denial of unemployment compensation to an employee who was removed from his new job pending clarification of “a possible hit” on his criminal background check. Roberts Elec. Constr. Co., Inc. v. Quinichett, 2012-Ohio-1156. The employee was hired for and began working at a temporary job on the condition that he pass a required background check. Unfortunately, something that came up in the BCII database and he was removed from the job pending clarification. He wasn’t cleared for four weeks, but by then, the temporary job had been completed and he was not rehired. The Court compared his situation to that of a social worker who failed to obtain her LISW within fifteen months as required as a condition of the promotion.

The ODJFS found that the employee had been discharged for just cause for violating a rule of the employer that required a clear background check within a reasonable time after being hired. The UCBR reversed on the grounds that “a possible hit” on his BCII report which was eventually found not to be an impediment to his employment was not the fault of the employee. Unfortunately, there is nothing in the decision indicating what the “possible hit” was. Was it a mistake by BCII? Was it merely an arrest, which does not indicate any guilt or fault by the employee? Was it a conviction (which the employee should have anticipated would come up) and he was cleared because the particular crime (or age of offense) did not disqualify him from his particular job? We cannot tell this from the opinion.

The Common Pleas Court reversed on the grounds that clearing a background check within a reasonable period of time was analogous to obtaining a professional license within a certain period of time. Since the Supreme Court had previously held that it constituted just cause to terminate a social worker for failing to obtain a required LISW within fifteen months, the trial court concluded that the employee in this case was similarly at fault for failing to obtain the clear background check within a reasonable period of time for the temporary job.

I have to admit that I am confused because the social worker in Williams had failed to pass the required exam in the required time, whereas in the case, there is no indication that the employee could have anticipated that “a possible hit” which did not ultimately disqualify him from employment could be his fault – in that he has no control over how the records are reported by BCII. One can only wonder if he was given the opportunity to provide information to clear his record within a few days or demonstrate a mistake and he simply failed to do so. However, from the sparse facts provided in the opinion, it appears that the court instead concluded that it was not the employer’s fault (for hiring an employee before s/he passed a background check) and therefore, it should not have to pay unemployment in this case.

In any event, the Court of Appeals affirmed the common pleas court that the employee was not entitled to unemployment compensation for his failure to pass the background check for a month. Thus, employees who are hired before passing their background checks (a very bad idea in my humble opinion) are not entitled to unemployment compensation when they are removed for “possible hits” in the BCII report – even if the BCII report is incorrect or the “hit” turns out to be an offense which does not disqualify them from employment.

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.

Ohio Appeals Court: Workers Compensation Does Not Bar Negligent Hiring Claim When Co-Worker Rapes Employee, Which Was Not Foreseeable.

Yesterday, the Butler County Court of Appeals affirmed the dismissal of a negligent hiring claim against a residential facility for the mentally disabled. Prewitt v. Alexson Servs., Inc., 2008-Ohio-4306 (8/25/08). In that case, an employee raped a co-worker, who then argued that the employer was negligent in its hiring and supervision of the rapist. Although the trial court dismissed the lawsuit on the grounds that her claim was covered and barred by the workers compensation statutes and his crime was not foreseeable based on the rapist’s prior criminal history, the Court of Appeals affirmed only on the grounds that the rape was not reasonably foreseeable under the circumstances.

The plaintiff employee argued that the employer was negligent in hiring and supervising the rapist and that her rape was reasonably foreseeable because the rapist had been convicted of disorderly conduct (for exposing himself in a public park) before he had been hired. He had also been investigated (and cleared) by the county MR/DD department and the local police after he was hired for assaulting a client by striking her with pillows. He had also been investigated twice by the local police for sexually assaulting patients. During these investigations, the rapist informed the police (who, in turn, informed the employer) that he suffered from bi-polar, was borderline schizophrenic and was not taking his medication. Moreover, he took a two-month FMLA leave of absence for his mental health issues and was cleared to return to work without any restrictions by his physician. Finally, another co-worker had privately claimed to the plaintiff that she had been raped twice by the rapist at work, but had never reported it because she did not want her family to know.

While the employer conducted pre-employment background and criminal checks of applicants, it relied on the employee’s honor to self- report any criminal convictions after the employee was hired. Nonetheless, the court found that this fact to be irrelevant in this case because the rapist had not been convicted of any similar crimes after being hired. Further, the pre-employment criminal check did not reveal the circumstances of the rapist’s disorderly conduct (which, in any event, was not – in the court’s opinion -- necessarily indicative of his predisposition to rape a co-worker in that it did not involve a physical assault). Because the employee had been returned to work by his physician after his FMLA leave without any restrictions, the court did not find that the rapist’s mental health issues were indicative of his future proclivity to rape a co-worker. In totality, the court found that there was no evidence that the employer possessed any knowledge which would indicate that it was reasonably foreseeable that the rapist would sexually assault a co-worker during working hours.

Nonetheless, the court reversed the trial court’s finding that the negligent supervision/hiring claims were barred by the workers compensation laws because the rape did not occur within the scope of the rapist’s duties, and therefore, was not an “accident.” Ohio Revised Code § 4123.74 provides, in pertinent part, "Employers who comply with section 4123.35 of the Revised Code shall not be liable to respond in damages at common law or by statute for any injury, * * * received * * * by any employee in the course of or arising out of his employment * * *." The employer argued that a prior Supreme Court decision (which held that the workers compensation laws did not bar sexual harassment claims) applied to bar this negligent hiring claim because the employee’s injury in this case was physical – not emotional as in sexual harassment cases.

However, the Court of Appeals disagreed: “Regardless of the nature of appellant's injuries suffered as a result of the rape, the controlling inquiry is whether the injury was "accidental" or occurred "in the course of or arising out of the employment." Under Ohio Revised Code § 4123.74, “an employer is not immune from liability for injuries not taking place in the course of or arising out of employment. "For an accident to 'arise out of' the employment as required under Workers' Compensation Act, it is necessary that the conditions or obligations of the employment put the employee in the position or at the place where the accident occurs; the accident need not have been foreseen or expected, but after the event it must appear to have had its origin in a risk connected with the employment, and to have flowed from that source as a rational consequence . . . The controlling test of whether an injury arises out of the employment is whether the injury is a natural and probable consequence of the nature of the employment. . . . . A similar analysis in this case demonstrates that the rape did not occur "in the course of" or "arise out of" appellant's employment as a rape is not a "natural and probable consequence" of the nature of the employment. Moreover, the rape does not constitute an ‘accident’ included in the definition of ‘injury.’"

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/12/2008/2008-ohio-4306.pdf.

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.