Where Do I Need to be Careful? Job Relatedness and Business Necessity

We are doing a four-part series on where employers get into trouble when screening workers. It’s four areas you should manage.


  1. Permissible Purpose
  2. Your Disclosure and Authorization before obtaining reports
  3. Your Pre/Post Adverse Action notices
  4. Job Relatedness and Business Necessity

The first three articles discussed Permissible Purpose, Disclosure and Authorization, and Pre/Post Adverse Action. These three areas are addressed by the Fair Credit Reporting Act—enforced by the FTC and Consumer Financial Protection Bureaus (CFPB).

We are going to switch agencies. When you order a court offense record (“criminal” record) the actions, you take when evaluating it are overseen by the EEOC and many employers have run afoul of their guidance when refusing employment to an individual based on an offense.

The EEOC has published guidance for employers and an overview can be found here. The EEOC’s goal is to ensure that criminal background reports are not used in a discriminatory manner. There are two main ways this can happen.

  1. Disparate treatment. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. This is not where most employers get in trouble.
  2. Disparate impact. Employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Proof of discriminatory motive is not required under a disparate-impact theory. This is where employers have been getting in trouble. Most have set “blanket exclusions” e.g., “any applicant with a felony conviction in the past 3 years is ineligible to be hired”. While that is not “disparate treatment,” it may well have a “disparate impact.”

We would recommend you discuss with your counsel a program that includes evaluating the following.

  • Job attributes. For example, does the position involve working with minors or other vulnerable populations or driving a vehicle? How closely will the employee be supervised? There are other job attributes you may want to consider too.
  • Offense attributes. What was the nature of the offense? Was it a felony or misdemeanor, arrest or conviction? When did it occur and how many offenses were there?

You probably do the above—unconsciously if not explicitly. Employers sometimes fail in the next step—determining if the offense(s) are “job-related and consistent with business necessity.” For example, if you are hiring a truck driver with no access to your company’s funds, an embezzlement conviction might not be a consideration. If you are hiring a CFO, a DWI conviction might not be a consideration. But you switch the offenses for those positions and they certainly become job-related.

This is the issue with setting blanket exclusions such as “any felony within the past three years” You should evaluate the “job-relatedness and business necessity” of any offenses.

Even after you have determined that the offense(s) are “job-related and consistent with business necessity,” the EEOC says you should perform an “individualized assessment.” This means you consider such things as performance since the offense, age at the time of the offense, rehabilitation, etc. The 30-some page full guidance can be found here.

This is the last of our series on several areas you need to manage and consult with counsel if you are in doubt. As we have mentioned in the previous articles, this is by no means an exhaustive list—but these are the areas where we have repeatedly seen employers get tripped up.

If you have suggestions or questions for further articles, please send us an email, support@victig.com.

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