EEOC Litigation Is Important for Companies to Know About and Understand

The U.S. Equal Employment Opportunity Commission recently brought a case against a well-known company.  This litigation shows the importance of understanding the appropriate way to handle criminal background and credit screening information in the course of the hiring process.  It is a reminder that having policies in line with the EEOC is imperative for a company looking to avoid possible litigation.

In the case EEOC v. BMW Manufacturing Co. LLC, it was alleged that BMW’s criminal background checks had a disparate impact on African American job applicants.  The problem that was identified?  BMW was alleged to have a broad background screening policy that went against the EEOC’s guidance regarding the use of criminal history against an applicant.  This broad policy was blamed for the loss of jobs of a large number of African American workers currently employed by BMW.  At the time, BMW’s criminal background screening guidelines barred employment to people with criminal convictions, regardless of the severity of the conviction or when the conviction actually happened.

In the Guidance issued by the EEOC regarding criminal convictions, it encouraged employers to consider whether or not the criminal record found would directly impact the applicant’s ability to do the job.  This sort of broad, or blanket policy regarding the use of criminal information is the specific type of policy that draws the attention of the EEOC and could subsequently lead to litigation.  As a result of this litigation, BMW is bound by certain rules pertaining to its use of background checks, and must comply with these rules going forward.  The settlement for 56 claimants in this case was for $1.6 million dollars.

Companies are encouraged to review their hiring policies and ensure that their use of background checks are in line with the EEOC, as well as the FCRA. Broad background check policies are highly scrutinized.  It is important for any company, large or small, to ensure that their hiring procedures include an assessment of the information received on a background check before making a determination on utilizing the information in the hiring decision.