Statement of Donald R. Livingston, 1 Partner, Akin, Gump, Strauss, Hauer & Feld

Meeting of November 20, 2008 – Employment Discrimination Faced by Individuals with Arrest and Conviction Records

Good morning Chair Earp, and Commissioners Ishimaru, Griffin, and Barker. Thank you for inviting me to speak on legal issues important to employers relating to the employment of individuals with criminal histories. I appreciate your leadership in trying to clarify the law under Title VII.

I am speaking today on my own behalf. I hope that my service as former general counsel of your agency, and my experience representing employers over the past 15 years, give me a perspective that will be helpful to you.

As you know, when ex-criminal offenders seek jobs, employers are confronted with a myriad of legal restrictions, hazards, and moral considerations. "Legal minefield" is an apt term for the situation, considering the tortuous risk-laden path employers are obligated to follow. Some laws bar ex-offenders from certain jobs, including jobs within the federal government. Other laws impose liability on employers for negligent hiring or retention decisions, and still others limit employer flexibility in giving consideration to criminal convictions. While complying with these laws, employers seek to maintain (indeed, to insist upon) consistency in the application of their policies to guard against any suggestion of arbitrariness and, more importantly, to avoid disparate treatment. For the most part, the Commission's guidance under Title VII has provided the flexibility necessary for employers both to satisfy these conflicting legal obligations and meet their requirements of Title VII.

The case law and EEOC guidance, opinion letters, and decisions all recognize that criminal convictions are relevant to fitness for employment. EEOC's 2006 Guidance, Race and Color Discrimination, states that employers are legally justified in restricting the employment of persons with criminal convictions "when the conduct that was the basis of the conviction is related to the position, or if the conduct is particularly egregious." This follows from the much earlier Policy Guidance on the Consideration of Arrest Records, which recognizes the responsibility of employers for the safety and well being of other persons.

I understand the Commission is now considering new guidance on the Title VII implications of employer hiring rules for persons with criminal histories. I urge that the guidance not seek to forbid rules that are designed to guarantee equal treatment. These rules tie the job-relatedness of specific crimes or subcategories of crimes to specific jobs, using the three criteria identified by the EEOC: nature and gravity of the offense, time since conviction or completion of sentence, and nature of the job held or sought. I believe that it would be unwarranted, for example, to conclude that a bright-line rule that prohibits recent embezzlers (e.g. within the last ten years) from working as bank tellers is not job-related because the employer did not conduct an extensive individualized assessment of the embezzler-applicants.

I respectfully urge the Commission also to reaffirm its interpretation in existing guidance that statistics showing the impact of a particular subcategory of crimes on the employer's own applicant pool are the appropriate statistics to evaluate disparate impact. National or regional statistics for crimes as a whole should be used only as a preliminary evaluative tool to assess whether disparate impact could have occurred. Consistent with the allocation of the respective burdens of proof under the Civil Rights Act of 1991, I ask that you consider that a no cause determination would be proper if the EEOC does not conclude that a subcategory of crimes had a disparate impact on the employer's own relevant applicant pool, absent extenuating circumstances that would make the applicant pool inappropriate.

I will address some of the reasons conviction records are important to employers, and discuss disparate impact and job-relatedness a little more specifically. Except with respect to recidivism rates, I will not discuss employment limitations on individuals with "criminal histories," as this larger group includes individuals with expunged or sealed conviction records, and individuals with arrests records, whether or not the individuals were convicted. It is my experience that employers are not considering closed arrest files when making hiring decisions.² Nor are they considering expunged or sealed records of conviction.

Employer Interest

Employers are not interested in an applicant's record of criminal convictions except to the extent a conviction reveals relevant past conduct. Under longstanding EEOC interpretation of Title VII, a criminal conviction constitutes reliable evidence that a person engaged in the conduct that necessary to establish the elements of the crime. For example, conduct that is implicit from a conviction for assault with a deadly weapon, driving while intoxicated, or burglary may show the applicant's lack of fitness for the job he seeks.

Concerns about recidivism are serious and should not be minimized. I cite you only two statistics from the 1994 Department of Justice Study on recidivism. Within three years of release from prison, the 270,000 individuals studied racked up 4.1 million arrests. Within the same three years, over half of them had been returned to prison.

A profile of jail inmates from 2002 shows that about half of all inmates were being held for violent or theft related offenses.³ Workplace violence is recognized as a significant public policy concern, and employee theft is epidemic. According to the U.S. Department of Justice National Crime Victimization Survey, two million assaults and threats of violence occur each year in the workplace. In the State of Hawaii, for example, violence was responsible for 12 percent of reported workers' compensation claims.⁴ Workplace theft⁵ and fraud drain American businesses of profits.⁶ Federal and State law has responded to protect coworkers and members of the public.

Federal and State Occupational Safety and Health laws require employers to provide a safe workplace. Employers who do not protect their employees from violent acts are subject to citation. Other federal laws restrict individuals with certain convictions from employment in jobs in the insurance,⁷ financial services,⁸ childcare,⁹ transportation,¹⁰ health care,¹¹ and other industries. For example, any conviction for a sex crime, an offense involving a child victim, or a drug felony may be grounds for denying employment in child care, social services, child day care, child education, and similar jobs. And, if you've laundered money, been dishonest, or breach a trust, and been apprehended and convicted, don't apply for a job with an institution insured by the Federal Deposit Insurance Corporation. You will not be hired, for a minimum of ten years beginning from the date of conviction.¹²

State laws put employers at considerable risk for hiring mistakes. There once was a legal principle that a party owes no duty of care to protect another from the harmful or criminal acts of third persons.¹³ In the workplace setting, this principle has been swallowed by its exceptions, which take the form of tort claims for negligent hiring and retention,¹⁴ respondeat superior liability for the acts of employees,¹⁵ and premises liability,¹⁶ as well as liability under special statutes that hold employers accountable for sexual harassment or sexual violence.¹⁷ The Attorney General's Report on Criminal History Background Checks recognizes that "[e]mployers and organizations are subject to potential liability under negligent hiring doctrines if they fail to exercise due diligence in determining whether an applicant has a criminal history that is relevant to the responsibilities of a job and determining whether placement of the individual in the position would create an unreasonable risk to other employees or the public."¹⁸

A 2004 opinion from the U.S. Fourth Circuit Court of Appeals is instructive. In Blair v. Defender Services, Inc.,¹⁹ Kristin Blair, a 19-year old college freshman, was assaulted in a University restroom by James Lee Harris, a member of the janitorial staff. The lower court dismissed a negligent hiring claim against Harris' employer. The Fourth Circuit reversed, finding "a material issue of material fact with respect to whether [the employer] should have known of Harris' violent conduct, as the undisputed facts are that Defendant never conducted any type of criminal background check on Harris prior to employing him." A background check would have indicated the existence of a protective order resulting from a criminal complaint.

That same year, 2004, the Georgia Court of Appeals decided TGM Ashley Lakes, Inc. v. Jennings.²⁰ The court affirmed a $13.25 million negligent hiring verdict against an employer that failed to check into the criminal history of Calvin Oliver, an applicant with criminal convictions for violence and theft offenses. Oliver was hired as a maintenance worker at an apartment complex where Danielle Jennings lived with her boyfriend and two year old son. Oliver entered Jennings' apartment while she was at work and killed her when she came home at lunchtime. The court of appeals found that the jury was entitled to consider whether Oliver's employer should have inquired into his criminal record prior to hiring him. The court stated that the jury was authorized to conclude that Oliver had a propensity for violence and that Jennings' injuries were foreseeable based on Oliver's criminal past.

For the employer, a background check is a means to determine whether relevant criminal conduct occurred among the hundreds, thousands, and ten of thousands of applicants an employer may process each year.²¹ As pointed out, the criminal conviction background investigation aids the employer to:

• guard against reasonably foreseeable violence,
• protect business assets,
• comply with state and federal laws that prohibit the employment of ex-offenders,
• fulfill legal obligations under federal and state Occupational Safety and Health laws,
• avoid respondent superior, premises, and negligent hiring liability for the acts of employees, including bodily injury, theft, arson or property damage, and
• protect employees from sexual harassment or sexual violence.

EEOC Guidance

The EEOC's Guidance on Race and Color Discrimination sets forth the burdens in proving disparate impact under Title VII. First, the claimant or plaintiff must identify a specific policy or practice that has a disparate impact. Only after this disparate impact has been proven, the employer "has the burden of demonstrating that the policy or practice is job-related for the position in question."

Under the Civil Rights Act of 1991, disparate impact must be shown with particularity. The EEOC's pre-1991 guidance suggests that a presumption of disparate impact can arise from national or regional statistics for crimes as a whole, even where the employer's policy is crime-specific. However the guidance recognizes that the presumption can be defeated if "more narrow data" shows no adverse impact."²² Since that policy guidance was first issued, it seems to have become plain that disparate impact must be shown with particularity from narrowly drawn data,²³ and that it is not sufficient to presume disparate impact from national or even regional statistics that show African American in the overall population are more likely to be convicted of a crime than whites (or, for that matter, that males in the overall population are more likely to be convicted of a crime than females). Generally, the prima facie case of disparate impact should only be established where it can be shown from the employer's applicant flow data that the conviction rates for the particular crime (e.g. shoplifting) or subcategory of crimes (e.g. theft) which is targeted in the employer's crime-specific convictions policy resulted in the exclusion from the employment of a disproportionately high number of members of a protected group. Current EEOC Guidance recognizes that "[i]f such data shows no adverse impact, than a no cause determination would be appropriate."²⁴ I believe this to be an accurate statement of the law. However, the Guidance incorrectly places the burden of proof on this issue on the employer.

When it comes to job-relatedness, the rule that employers have followed since 1975 is set out by the Eighth Circuit Court of Appeals in Green v. Missouri Pacific Railroad Company.²⁵ It was later adopted by the EEOC in its Policy Statement on the Issue of Conviction Records under Title VII.²⁶ Under this Policy Statement, when it has been shown that a conviction policy has an adverse impact on a protected group, the employer must show that it considered these three factors to determine whether its decision was justified by business necessity:

• The nature and gravity of the offense or offenses,
• the time that has passed since the conviction and/or completion of the sentence, and
• the nature of the job held or sought.

These principles have served well and ensure that the conduct underlying the conviction is relevant to the responsibilities of the job. After the issuance of EEOC's guidance in the 1980's, very few claims have been asserted by the EEOC or others based on the failure of an employer to correctly apply these principles to hiring decisions.

Conclusion

I appreciate the opportunity you have given me to appear here today to contribute my perspective. I have learned a great deal from the writings and research of some of the other panelists. They have contributed a great deal toward helping us all better understand the problems facing ex-offenders in finding employment. Clearly, the impact of most hiring restrictions based on criminal convictions falls most heavily on racial and ethnic minorities, and on men. I hope that my statement proves helpful to the Commission, as it seeks to protect ensure the promise of Title VII, consistent with the right of employers to utilize job-related criteria for selection decisions.

Footnotes

¹ Partner, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C.; general counsel of EEOC, 1990-93.

² However, employees with past arrests can, in come cases, create substantial liability risks for employers. For example, in McKishnie v. Rainbow Int'l Carpet Dyeing & Cleaning Co., No. 91-3617-CA Div (Fla. Cir. Ct. Mar. 11, 1994), the employer was found liability for the murder of two students by an employee with an arrest record, even though the charges had been dismissed.

³ Special Report, Profile of Jail Inmates, 2002, U. S. Department of Justice, Bureau of Justice Statistics, http://www.ojp.usdoj.gov/bjs/pub/pdf/pji02.pdf.

⁴Workplace Violence, Intervention, Prevention, and Recovery, Hawaii Workplace Violence Working Group Committee, State of Hawaii Department of Attorney General, p. iii, http://hawaii.gov/ag/cpja/quicklinks/workplace_violence/WVfull.pdf.

⁵ Losses from employee theft can include stolen money, data, intellectual property, merchandise, office equipment, and company secrets. It can also include the alternation or falsification of company records to embezzle money or hide the theft of merchandise, direct stealing of inventory or cash, and the theft of credit card numbers. Most losses come from the employer, but losses are also be incurred by clients, customers, contractors and coworkers.

⁶ A Jack L. Hayes International survey of 24 large retail companies revealed that one in every 28 employees was apprehended for theft in 2007. On a per case average, dishonest employees steal a little over 6 times the amount stolen by shoplifters. (http://www.hayesinternational.com/thft_srvys.html). A study of certified fraud accountants estimates that six percent of revenue is lost from occupational fraud and abuse. 2002 Report to the Nation, Occupational Fraud & Abuse, Association of Certified Fraud Examiners, https://www.acfe.com/article.aspx?id=4294968212.

⁷See, e.g., 18 U.S.C. § 1033(e)(1)(a).

⁸See, e.g., 12 U.S.C. § 1829.

⁹See, e.g., 42 U.S.C. § 13041.

¹⁰See, e.g. 49 U.S.C. § 44936.

¹¹See, e.g., 42 U.S.C. § 1320a-7.

¹² 12 U.S.C. § 1829.

¹³ In Ponticas v. K.M.S. Investments, 331 N.W. 2d 907 (Minn. 1983), the Supreme Court of Minnesota listed numerous cases from various jurisdictions that recognize this claim in 1983: Becken v. Manpower, Inc., 532 F.2d 56 (7th Cir.1976); Kendall v. Gore Properties, 236 F.2d 673 (D.C.Cir.1956); Texas Breeders & Racing Association v. Blanchard, 81 F.2d 382 (5th Cir.1936); Svacek v. Shelley, 359 P.2d 127 (Alaska 1961); Najera v. Southern Pacific Co., 191 Cal.App.2d 634, 13 Cal.Rptr. 146 (1961); Mallory v. O'Neil, 69 So.2d 313 (Fla.1954); Hines v. Bell, 104 Ga.App. 76, 120 S.E.2d 892 (1961); Abraham v. S.E. Onorato Garages, 50 Haw. 628, 446 P.2d 821 (1968) Stricklin v. Parsons Stockyard Co., 192 Kan. 360, 388 P.2d 824 (1964); Strawder v. Harrall, 251 So.2d 514 (La.App.1971); Priest v. F.W. Woolworth Five & Ten Cent Store, 228 Mo.App. 23, 62 S.W. 2d 926 (1933); Bennett v. T & F Distributing Co., 117 N.J. Super. 439, 285 A.2d 59 (1971), cert. denied 60 N.J. 350, 289 A.2d 795 (1972); Vanderhule v. Berinstein, 285 A.D. 290, 136 N.Y.S.2d 95, modified, 284 A.D. 1089, 136 N.Y.S.2d 349 (1954); Wegner v. Delly-Land Delicatessen, Inc., 270 N.C. 62, 153 S.E.2d 804 (1967); Mistletoe Express Service, Inc. v. Culp, 353 P.2d 9 (Okl.1959); Guedon v. Rooney, 160 Or. 621, 87 P.2d 209 (1939); Wishone v. Yellow Cab Co., 20 Tenn. App. 229, 97 S.W.2d 452 (1936); Evans V. Morsell, 284 Md. 160, 395 A.2d 480 (1978).

¹⁴ Generally, negligent hiring liability is predicted on the employer's negligence "in placing a person with known propensities, or propensities which should have been discovered by reasonable investigation in an employment position in which, because of the circumstances of the employment, it should have been foreseeable that the hired individual posed a threat of injury to others."Ponticas v. K.M.S. Investments, 331 N.W. 2d 907 (Minn. 1983).

¹⁵Under respondeat superior liability, the employer, as the employee's master, is called to answer for the tortious acts of his servant, the employee, when those acts occur in the course and scope of the employee's employment.

¹⁶ Some States impose a nondelegable duty upon a landowner to keep his premises in reasonably safe condition, and a landowner must use ordinary care to do so. E.g. Hickman v. Allen, 217 Ga. App. 701, 458 S.E.2d 883 (1995). A landowner can be liable for third-party criminal attacks if the landowner has reasonable grounds to apprehend that such a criminal act would be committed but fails to take steps to guard against injury.

¹⁷ Also relevant is the Restatement (Second) Agency § 213 (1958), which states, "A person conducting an activity through servants or other agents is subject to liability from harm resulting from his conduct if he is negligent or reckless …in the employment of improper person or instrumentalities in work involving risk of harm to others."

¹⁸http://www.usdoj.gov/olp/ag_bgchecks_report.pdf., p.1 (June 2006).

¹⁹ 386 F.3d 623 (4th Cir., 2004).

²⁰ 264 Ga. App. 456, 590 S.E.2d 807 (2004).

²¹ Most screening is done by professional background screening services that utilize records that are available to the public from government agencies. It has been noted that there are often inaccuracies in these databases, but it is not clear whether this has been proven. Nonetheless, the fact that this screening is conducted by third parties provides applicants with the protection and safeguards of the Fair Credit Reporting Act. If the applicant is not hired because of the report, the applicant must receive a pre-adverse action disclosure that explains the applicant's rights, which include the right (1) to notice about reporting disclosures that have been made, and (2) to challenge the accuracy of the information before the employer takes final action on the application.

²²EEOC Policy Statement on the Use of Statistics in Charges Involving the Exclusion of Individuals with Conviction Records from Employment (7/29/87), www.eeoc.gov/policy/docs/convict2.html

²³ This particularized showing is required under 42 U.S.C. § 2000e-2(k)(1)(A)(i), enacted as part of the Civil Rights Act of 1991.

²⁴See note 22.

²⁵ 523 F.2d 1290 (8th Cir. 1975).

²⁶http://www.eeoc.gov/policy/docs/convict1.html