Second Chance Employment: The Risks, Rewards, and Requirements for Hiring Applicants with Criminal Convictions

By Morgan Pike Epperson and Mary O. O’Neill

The prevailing attitude towards hiring applicants with criminal convictions is shifting. The Society of Human Resources Management advocates for this “second-chance employment,” and increasingly, cities and states are passing “ban the box” laws prohibiting employers from requesting conviction information on employment applications. Now, the federal government is getting in on the act (literally) with the bipartisan First Step Act. The Act provides prisoners retroactive “good time credit” and incentives for participating in prerelease programs; and requires the Bureau of Prisoners to release low and minimum-risk prisoners to prerelease custody in halfway houses or home confinement.

Second chances sound great in theory, but what does this attitude-shift mean for employers? Many employers find it difficult to recruit qualified applicants in light of the low unemployment rate – currently 4%. The labor shortage, combined with the potential increase of applicants with criminal convictions due to “ban the box” efforts and the First Step Act, may necessitate hiring applicants with criminal convictions.

When is it Okay to Hire (or Choose Not to Hire) an Applicant with a Criminal Conviction?

 Many employers conduct background checks during the hiring process, but employers must walk a fine line between restrictions on background checks and the risks of not conducting background checks. Employers should ask themselves:

Does Applicable State or Federal Law Mandate a Background Check?

Look for federal, state, and local laws that mandate checks for particular industries. These laws typically prohibit hiring applicants with convictions related to the specific industry. For example, many states prohibit hiring convicted sex offenders as teachers, and the National Child Protection Act requires childcare providers to screen for convictions related to the safety and well-being of children, elderly, or disabled persons.

Does Your State Allow Negligent Hiring Claims?

Negligent hiring claims provide for claims against the employer for injuries caused by an employee where the employer knew or should have known the employee might cause a particular injury because of his criminal history. Generally, the employee’s conviction must be related to the injury – for example, a banking employer knowingly hiring an applicant convicted of identity theft, could be responsible if the employee steals a customer’s identity. If your state allows negligent hiring claims, check whether the state provides immunity or favorable presumptions for conducting background checks, or for the applicant participating in rehabilitation programs. For example, Tennessee immunizes employers hiring applicants with criminal records that have received a certificate of rehabilitation. And Florida courts presume an employer was not negligent where the employer conducted a background check that did not reveal information showing unsuitability for the particular job.

Does Your Current Background Check Policy Comply with Applicable Federal, State, and Local Laws?

• Do Any Applicable Laws “Ban the Box” or Require Consent?

While some states may mandate background checks for certain jobs, many states have adopted “ban the box” laws, prohibiting employers from checking criminal history until an employment offer is made. Some states (Alabama, for example), and the Fair Credit Reporting Act, require the applicant’s consent before conducting a criminal background check. Check out the Equal Employment Opportunity Commission’s and Federal Trade Commission’s co-published FCRA guide, Background Checks: What Employers Need to Know. The FCRA requires employers conducting criminal background investigations to provide the applicant clear and apparent notice – in a stand-alone document – that the employer may obtain criminal records. Then the applicant must provide written consent. If the employer does not hire the applicant because of investigation results, the employer must provide a copy of the report and summary of FCRA rights. (The Consumer Financial Protection Bureau has a summary of rights on its website.) The employer must then provide the applicant a reasonable time (usually five days) to discuss or dispute the report before the employer refuses to hire the applicant.

• Have You Narrowly Tailored Your Policy to Comply with EEOC (or state fair employment agency) Guidance? 

Most employers know Title VII prohibits employers from discriminating because of race, gender, national origin, color, or religion, but how can an employer violate Title VII because of an applicant’s criminal conviction? The EEOC’s guidance, Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights act of 1964, is not binding, but courts often follow it, and the EEOC may investigate potential Title VII violations.

The EEOC takes the position that an employer should not ask about criminal convictions during the application process. Employers risk EEOC investigation or charge if the employer’s criminal-conviction policy creates a disparate impact on a protected class of applicants. For example, the guidance notes, a policy that excludes all applicants with convictions may disproportionately affect minorities. Finally, employers should apply criminal conviction policies in a consistent and neutral manner, without regard to an applicant’s race, gender, national origin, color, or religion.

To withstand EEOC scrutiny, narrowly tailor your policy to identify criminal conduct sufficiently related to the specific job. The policy should consider the nature and severity of the criminal conduct, the time elapsed since the conduct, and the nature of the job sought.

• Does Your Policy Allow Individualized Exceptions?

This may seem contrary to the “neutral and consistently applied” guidance, but the EEOC recommends employers notify applicants when a policy may exclude an applicant based on criminal conviction and give the applicant opportunity to explain why an exception should apply, or to clear up inaccuracies in the record. So what factors may point towards exception?

What Should Recruiters Be Looking for in Applicants with a Criminal Conviction?

• Successful, post-conviction work history – applicants having had a job since release, supported by the prior employer’s positive reference
• Lengthy and successful work history before conviction
• Positive employment and character references
• Post-conviction rehabilitation efforts, such as education or training
• Convictions that are unrelated to potential job duties, e.g., possession for marijuana for a non-safety sensitive job
• Single offenses, or low number of offenses, i.e., not a repeat offender
• Significant amount of time between conviction and application – an applicant who committed offense at age 18, now 40, with no other criminal history

How Should Employers Handle Complaints from Co-Workers Who Do Not Want to Work with Employees with a Criminal Conviction?

Once an employer determines to hire an applicant with a criminal conviction, the employer may face complaints from employees who do not want to work with the convicted employee. Employers should first endeavor to keep criminal convictions confidential. Maintaining confidentiality is not only prudent in light of federal and state privacy laws but can also prevent employee complaints. I asked my colleague, Bernard Bobber, who said the best strategy is to speak directly with the complaining employees. Talking points may include:

• Handbooks, codes of conduct, training, policies, etc. that state all employees must treat one another with respect
• Pointing out all employees must work cooperatively for a successful company
• The convicted employee has paid her debt to society
• The convicted employee is managed by a parole officer, providing incentive to behave
• Complaining employee may report inappropriate behavior to Human Resources, pointing out existing reporting policies or procedures
• Estimated 1/3 of U.S. adults have criminal conviction; working with these employees is a fact of life