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New York Employment Background Checks Under Scrutiny

Recently reiterating its stance that in some cases employment criminal background checks amount to racial discrimination, the Equal Employment Opportunity Commission advised it was filing suit against employers that had improperly applied the screens.
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This occurred while criminal background screening firm Sterling Infosystems Inc., headquartered in New York City’s financial district, boasted an annual growth rate of nearly 35 percent over the course of a decade. Sterling is tapped by companies ranging from Walt Disney to Wal-Mart, assisting businesses in determining whether workers or potential workers have violent backgrounds or histories that might include drug dealing or impaired driving.

Such practices aren’t inherently illegal, but as our employment law attorneys are well aware, they can sometimes lead to legal problems if firms aren’t careful.

Research conducted in 2012 by the Society for Human Resources Management revealed that 9 out of 10 employers conduct at least some form of criminal background checks – an exponential uptick in the last two decades.

Companies like Sterling boast that they keep the workplace safe. In some cases, firms have a legal duty to know who it is they are bringing aboard, particularly if the business model is geared toward children or other vulnerable populations. On the other hand, these background check companies don’t always get it right. And sometimes, even when they do, if the findings are found to be outside of the bounds of anti-discrimination laws, companies might find themselves footing the bill for costly lawsuits.

In cases where the background information was incorrect, denied workers are mostly going after the background check companies directly. However, the employer may also get wrapped up in that litigation because, as the EEOC advises, employers who rely heavily on those background checks in the hiring process, without verification or consideration to the individual worker/applicant, the nature of the crime or how long ago it occurred, may find themselves liable for discrimination.

Case-in-point was the recent EEOC lawsuit filed on behalf of a 14-year employee of a BMW manufacturing facility in South Carolina. In the course of a re-organization effort, the firm learned that the worker had a decades-old misdemeanor on his record. He was subsequently fired. The EEOC alleges this is discriminatory.

In another case, the EEOC is taking Dollar General to task for reportedly denying two workers jobs on the basis of prior criminal backgrounds.

The reasoning of the EEOC is that minority populations are more likely to be arrested and imprisoned. Therefore, to block employment solely on one’s criminal history could be found to be racially discriminatory.

However, the issue poses significant quandaries for businesses, who also fear liability if they hire a potentially dangerous worker. Striking an appropriate balance is not a simple task.

We advise firms of all sizes to take a closer look at their criminal background check policies. Better yet, have an experienced business litigation attorney conduct a review for you to determine whether there are any areas of your current procedure that may leave your company vulnerable to litigation.

We know that the EEOC is aggressively approaching these types of cases. A proactive approach may be your firm’s best defense.

The Law Offices of Ira S. Newman provides business litigation representation in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or send us an e-mail.

Additional Resources:
Background-check industry under scrutiny as profits soar, June 23, 2013, By Aaron Elstein, Crains New York
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