How to Use Criminal Background Checks and Not Get Sued

criminal background checks

The EEOC has put companies in a difficult position regarding the use of criminal background checks to screen job applicants.  This is because companies are obligated to screen out criminals, but now they face potential liability for doing just that.  Here I will explain the reason for the conflict and how companies can best protect themselves.

Why Companies Use Criminal Background Checks

Criminal background checks are used by 70 to 80% of companies according to the Society for Human Resource Management.  Federal Judge Roger Titus recently noted that even the EEOC uses criminal background checks in its hiring process.  Companies use criminal background checks for several reasons and listed below are the top three:

1) Most companies simply do not want to employ dangerous or dishonest people.

2) Companies can get sued for negligent hiring and retention if they employ a person with known criminal propensities.

3) Some companies are legally required to screen out criminals for certain positions.

The Case Against Using Criminal Background Checks

There is a risk that the blanket exclusion of convicted criminals in employment screening will have a discriminatory impact on minorities.  Racial minorities have disproportionate conviction rates.

For example, African Americans make up approximately 13% of the general population, but they account for 40% of the incarcerated population.  The U.S. Department of Labor offers statistics and an explanation of the EEOC’s enforcement guidance. The concern advanced by the EEOC and civil rights organizations is that a blanket exclusion of those with criminal records will exclude more minorities and create a risk of employment discrimination.

The EEOC’s Solution and Attempts to Enforce It

The EEOC has launched an aggressive campaign against the use of criminal background checks.  They sued a number companies, including BMW and Dollar General, over their use of criminal background checks.  The EEOC charged these companies with discriminating against minorities for excluding all applicants with criminal records.   The EEOC contends that companies cannot exclude all applicants with a criminal records.  To do so, they say, will discriminate against minorities.

Instead, companies should assess each situation individually and determine if the applicant’s criminal record presents a genuine disqualification.

A Set Back for the EEOC and Confusion for Businesses

A federal judge recently dismissed one of the EEOC’s background check cases and sharply criticized the EEOC for filing the case.  The court found that there was no evidence of employment discrimination.   The judge stated that the companies use of criminal background checks was “reasonable and suitably tailored to its purpose of ensuring an honest workforce.”

The company in that case, Freeman Companies, screened for convictions that had occurred in the last seven years and did not screen for arrests.  The judge rejected the EEOC’s argument that this screening process would adversely impact minorities.  The Wall Street Journal offers more details on the judges ruling.

How to Use Background Checks and Stay Out of Trouble

Now that the courts have rejected the EEOC’s position on background checks, how should businesses use background checks to screen job applicants?  The safest course of action is to follow the EEOC’s rules because they may continue their enforcement efforts .

Here is a summary of best practices:

  • Conduct Background Checks Only After a Conditional Offer of Employment is Made

The best way to control risk is to reduce the number of background checks.   Do not run background checks on all applicants.  Instead, make your employment offers conditional on passing a background check.

This will dramatically reduce the number of background checks and avoid numerous other thorny issues as well (background checks often reveal other sensitive personal info that could create other grounds for suit).

  • Modify the Use of Criminal History Information 

Only search for criminal convictions, not arrests.  Arrests do not mean much so exclude them.  Consider limiting convictions to 7 to 10 years.  Conduct an individualized inquiry into each case to determine the nature of the crime and how it relates to the position.

For example, if an applicant is applying to be a truck driver and he has driving related offenses, you can safely exclude that applicant. However, if the applicant has a 30 year old conviction for disturbing the peace, then that offense should be ignored because it does not relate to the applicant’s ability to drive a truck.

Also, allow the applicant an opportunity to explain the situation.  The point is to use the criminal background information in a reasonable individualized manner instead of a broad policy of systematic exclusion.

  • Have a Consistent Policy

It is essential to have a consistent policy in how criminal background checks are used.  If people are treated differently, the company would be open to allegations of employment discrimination.   This puts employers in a conundrum because the EEOC wants companies to look at each criminal history finding on an individual basis.  This makes it almost impossible to have a truly consistent policy because subjectivity will creep into the individualized inquiries.

Companies will need to document each case and explain the basis for each decision.  As long as a logical basis exists for each decision, the company should be able refute any allegations of discrimination if they arise.


The EEOC is putting employers in a difficult situation with its aggressive enforcement efforts over criminal background checks.  No perfect solution exists now.  The EEOC should modify its position and issue clear realistic guidelines for companies.

In the meantime, companies need to walk a fine line and keep accurate records to support each decision involving an applicant’s criminal history.

Background Check Photo via Shutterstock


Robert Ottinger Robert Ottinger is an employment attorney with The Ottinger Firm, P.C. based in New York and San Francisco. He has been representing organizations and employees in employment matters for over seventeen years.

16 Reactions
  1. Very good advice. Hopefully someone with a criminal record has learned their lesson and is ready to contribute to society in a meaningful way. If that’s the case I wouldn’t want to see their past ruin their future.

    • I agree Robert Brady. But it is a tough balance for companies because they could be liable if they hire someone with known criminal propensities. There is a cause of action for “negligent hire and retention.” These cases arise when one employee harms another employee. The victim can sue to the company if they had “notice” that the employee was dangerous.

  2. It’s depressing that it only takes one error for you to lose your life. Changing their life is already difficult. If their environment continues to put roadblocks to their success, then they are more likely to go back to their old life. I am all for change as long as the criminal has clearly learned his lesson.

  3. Perhaps someone with a criminal record should be given a second chance to work so that he or she can go on with life as normal as possible and be financially independent. They should not be blacklisted perpetually for a bad record in the past.

  4. It’s like you’re caught between a rock and a hard place as an employer.

    Let me give you an example from my past. I worked in a regional bank, and we experienced a significant embezzlement from a teller. She went into elderly customers’ accounts and drained them over a period of a year, by forging withdrawals every month, and then suppressing sending the statements. This was in the early 90s, when technology wasn’t as good and low tech embezzelements were fairly easy to do.

    She was hired through a temporary employment agency, which was supposed to check for criminal backgrounds. They screwed up and somehow let her through. Turns out, she had been convicted of not just one, but two theft related offenses at different times.

    So what did our bank do? Well, of course, we sued the agency — and got a big settlement from them. It almost put the agency out of business.

    The point being, when you put people in a position to have control over money, their trustworthiness is definitely an issue. The temptation is huge when you are around money everyday — the dirty little secret in banks is that one of the biggest theft challenges they have are their own employees. (I know, because I was in the legal department and worked with our audit department on at least a dozen employee embezzlements, large and small.) There are legitimate reasons to run criminal background checks when an employee is in a position to handle money.

    – Anita

    • Anita,

      Quite an eye opener. And quite a lesson learned.

      Unfortunately, in where I live, embezzlements often go unnoticed – even though we, as employers, know about it. Taking legal actions is a lengthy process – and a costly one, too; it seems that taking legal actions mean a lose-lose situation here.

  5. Great point Anita about the need to perform background checks on employees who will be handling money. Sadly companies can also be held liable for work place violence. We have a case pending right now that involves an attack that occurred in the workplace. The attacker was an employee with a long record of violence and harm to other co-workers. The employer faces liablity for keeping this employee on the payroll. So companies really are between a rock and a hardplace. If a company wants to give someone a second chance they are taking a big risk. They will have closely monitor that employee becasue if anything goes wrong, the could be on the hook.

  6. Does anyone know, what is the standard procedure for the background check conducted by employers? Real criminal history check actually requires fingerprinting, not just browsing some website for $ 9.99 a month. If it is not done right, the results may actually be inaccurate.

  7. Most background checks will never bring any misdemeanors up after tem years anyways, but the point is that NO PERSON with anything over 7 to 10 years such as misdemeanors should EVER be kept from work, especially if they have since then went to college, have references and letters of recommendations. There is also cases of known and suspicious character assassination and defamation of character that was more relevant than the arrest or plea bargain they were more or less coerced into. It happened to me. I should know full well. I was not a criminal. but I was treated like one and there was literally nothing I could do about it. It took me over ten years to even get any life back. Trust me it’s cold in the world.

    • I understand you very well. I was charged with criminal possession of weapon, stalking, assault. I was lucky they didn’t charge me with murder. Final outcome- $100 fine for misdemeanor disorderly conduct. Cops knew I will be acquitted of all this idiotic charges so they at least tried to make my bail high and they succeed. It was 14 years ago.
      I am about to retire now and I want to get another job , but when I went to apply for the GOES card, all this arrest charges popped up during criminal check. My assumption was they ( Homeland Security) actually had access to my citizenship application, cause she read back to me even my traffic violation I listed on my application. Any idea how can I run my own criminal record to make sure it’s clear?

      • Pete I have never used a service like that so I cannot recommend one. If you Google the topic though you will a lot of options like Instant Checkmate etc. Hopefully one of those can help you clear things up. If that does not work, you might want to meet with a local criminal attorney.

      • Pete,

        I just wanted to let you know that you can go to the courts where you resided and worked. Once at the court house, usually the clerk’s office, you could run your own search. It is public information. The federal government, when one is going for a federal security clearance can obtain closed and sealed records to determine one’s suitability for classified or sensitive information. Don’t rely on a internet site to get you your information. You need to to do the search your self or hire someone that knows where to look for the information. I’ve been doing background investigations since 2007 for corporate and federal agencies and know it takes an investigator to visit the locations to get the right information.

        Best of luck to you


  8. The EEOC agrees that criminal background checks should be limited in scope. I think 7 to 10 years is reasonable also so people are not haunted forever. Some of the suits filed by the EEOC were against companies that had unlimited background checks and the companies were denying people jobs over minor incidents that occurred decades ago. It looks like the courts are pushing for a balanced approach.

  9. Yes, finally the employers are in risk. They can not do criminal background check as well as they might face lawsuit of no due diligence if some crimes happen in the company premise. So it is quite an impossible and weird thing. Anyways, there are always loopholes in every law and thanks for your valuable tips. On the other hand, the employers should not indulge in discrimination activities and must conduct a fair and transparent background check for everyone’s betterment.

  10. I want to know what happens to my personal info….AFTER a background check is run. I asked that to the company that did my DG check, and never got a reply. Do they save it for use again, delete my info? Throw it in a database….They hold my personal info in their hands, and I want to know what happens to that info.