Give Them a Chance, It’s the Law: Pre-employment Criminal Background Checks Title VII and the Fair Credit Reporting Act

Give Them a Chance, It’…

In this day and age, employers can little afford to exclude a qualified employee without good reason. While obtaining a pre-employment criminal background check may seem like an easy way to screen out problem employees, applying such a policy without looking to specifics could also screen out a qualified candidate. For example, a felony for writing a bad check 20 years ago may not justify denying an applicant employment as head custodian. Looking to the specific facts related to an applicant’s criminal record isn’t just good practice, it’s what the law requires under Title VII and the Fair Credit Reporting Act.

Title VII

Title VII of the Civil Rights Act of 1964 (Title VII) prohibits employment discrimination based on race, color, religion, sex, or national origin. There are two different types of discrimination under the Act. The first type is straightforward discrimination: disparate treatment. This would be when two similar individuals are treated differently based on their race. For example, if a black applicant is denied employment based on a petit larceny conviction, but a similarly qualified white applicant with the same criminal history is hired. To avoid this type of discrimination, the temptation might be to create a blanket policy to not hire anyone with a criminal history. However, such blanket policies create pitfalls of their own.

The second way to allege employment discrimination under Title VII is if a background check criterion has a disparate impact on a protected class. Griggs v. Duke Power Company decision, 401 U.S. 424 (1971). For example, while a background check policy may be neutral on its face, it may have a disparate impact on Hispanic and black applicants given differences in arrest rates. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act (EEOC Notice 915.002)(May 25, 2012) (available at It has been held it was discriminatory under Title VII for an employer to “follow the policy of disqualifying for employment any applicant with a conviction for any crime other than a minor traffic offense.” Green v. Missouri Pacific Railroad, 523 F.2d 1290, 1293 (8th Cir. 1975). If a criminal background policy has a disparate impact, it may only be allowed where the policy is “job related and consistent with business necessity.” See EEOC Guidance link above.

There are two ways to prove that a given criminal criteria is “job related and consistent with business necessity.” The first is to have validated studies which show the relationship between job performance and the criminal criteria. The second, and more common, way is “The employer develops a targeted screen considering at least (1) the nature of the crime, (2) the time elapsed, and (3) the nature of the job and then provides an opportunity for an individualized assessment for people excluded by the screen to determine whether the policy as applied is job related and consistent with business necessity.” See EEOC Guidance link above.

Where the background check may be applied to deny an applicant employment, there should be a documented “individualized assessment” where the employer “informs the individual that he may be excluded because of past…conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual's additional information shows that the policy as applied is not job related and consistent with business necessity.” See EEOC Guidance link above.

Fair Credit Reporting Act

The use of criminal background checks to screen applicants is also governed by the Fair Credit Reporting Act (FCRA) because criminal background checks are generally considered “consumer reports.” 15 U.S.C. § 1681a(d).

Under the FCRA, the employer must provide a "clear and conspicuous" written disclosure to the applicant explaining that information obtained in their criminal background check may be used for employment-related purposes. The notice must stand alone and cannot be included in the employment application. The form should "solely" consist of the disclosure. 15 U.S.C. § 1681b(b)(2)(A). The employer must get the applicant’s permission in writing to obtain the criminal background check. This authorization is the only other thing allowed on the disclosure above. Id. The report may only be used for "employment purposes" so keeping the information in the criminal background confidential and on a need-to-know basis is crucial. 15 U.S.C. § 1681a(h).

If the employer finds information in the criminal history that may disqualify the applicant for work and intends to take any "adverse action" (defined in 15 U.S.C. § 1681a(k)(1)) such as denying employment, the employer must perform certain actions. First, the employer must furnish the applicant with a copy of the report. 15 U.S.C. § 1681b(b)(3)(A)(i). Second, the employer must give the employer a copy of their rights regarding their credit history as prescribed by 15 U.S.C. § 1681g(c)(3). 15 U.S.C. § 1681b(b)(3)(A)(ii).

Importantly, the employer should give the applicant a “real opportunity” to “contest the adjudication or change its outcome.” Moore v. Rite Aid Hdqtrs Corp., 33 F. Supp. 3d 569, 574-75 (E.D. Pa. 2014). An applicant must be able to contest an action before the "adverse action" is taken. A final decision must not be made before the applicant has a “real opportunity to contest” the decision. The “real opportunity to contest” the decision must not be a mere formality. Id.

Once the applicant has had a real opportunity to dispute the contents of the report, the employer may then decide to proceed with adverse action such as denying employment. If adverse action is taken, the employer must send an Adverse Action Notice. 15 U.S.C. § 1681m(a).

The Adverse Action Notice should include:

  • The adverse action taken;
  • The name, address, and phone number of the consumer reporting company that supplied the report;
  • a statement that the company that supplied the report did not make the decision to take the unfavorable action and can't give specific reasons for it; and
  • a notice of the person's right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days;
  • Any numerical credit score considered in taking adverse action; and
  • Information regarding the model used to create the credit score.

General Tips

While each situation is unique and it is always wise to seek the advice of counsel, there are a few things an employer can do to help ensure compliance with Title VII and the FCRA when relying on pre-employment criminal histories.

  • Set your standards ahead of time: For each job type, decide what information from the criminal history might be relevant to job. Is the job a position of trust where crimes involving dishonesty would be particularly telling? Does the job require a clean driving history? Document what standards you are applying to the job and why so that no one can accuse you of offering a post hoc rationale for an employment decision.
  • Apply your standards fairly: Once you have your standards, apply them to everyone equally, without making exceptions for friends or family or anyone that might be seen as being treated preferentially.
  • Give them a chance: Both Title VII and the FCRA require an applicant be given a chance to explain their criminal history. Hear them out. It takes only a little time and effort to consider what the applicant has to say and it’s the easiest way to avoid a lawsuit. Title VII requires an employer to engage in an informal, interactive process, so make sure you keep an open mind and consider what the applicant says before making a final decision.
  • Document: Throughout the process, make sure you are documenting all the efforts you are taking to be fair and comply with the law.

If you have any questions about this article, or Title VII and the Fair Credit Report Act in general, please contact Andrew Hanlin (804-377-1277) at or Steve Setliff (804-377-1261) at