Identifying and Eliminating Disparate Impact Practices

July 8, 2016

In our last post in the EEOC series, we talked in detail about the definitions of and distinctions between disparate treatment and disparate impact. In this blog post, we will discuss how to identify disparate impact practices that can be hiding in your workplace policies and how to eliminate them.

 

Just to review, disparate treatment refers to specific treatment of an individual based on or in any way affected by his or her race or national origin that is different from treatment of another individual of a different race or national origin. Disparate impact, by contrast, refers to a neutral policy of an employer that has the effect of disproportionately negatively affecting a certain protected group.

 

As your HR team reviews annual hiring statistics, they should be paying close attention to the rates at which applicants belonging to protected minority classes are denied employment due in part or wholly to an applicant’s criminal background. If your statistics show that minority applicants are being denied at higher rates than non-minority applicants, then you qualify as a target for EEOC disparate impact violations.

 

So what can you do about it and how can you protect your business from an EEOC investigation?

 

The EEOC has stated very clearly that if an employer’s hiring policy precludes employment based on the existence of criminal records then there must be documented evidence that the criminal records are “job related for the position in question and consistent with business necessity”. For example, if the position in question relates to child care or elderly care or any other position that deals with vulnerable populations, then a hiring policy that precludes all applicants with certain criminal convictions may be justified. But for most types of jobs, a general hiring policy applied blindly across the board will get an employer into trouble.

 

This is why we recommend moving to a system where any hiring decision dealing with an applicant who has criminal records is made on a case by case basis with consideration given to each individual situation.

 

If your company insists on keeping exclusionary hiring policies for dealing with criminal records, then you will have to make sure that your policies are able to pass muster with the EEOC’s requirements that the convicted offense is:

 

  1. Job related for the position in question

  2. Consistent with business necessity

 

But what factors must be considered when trying to satisfy these two requirements? The Eighth Circuit Court answered this question in its 1975 case Green v. Missouri Pacific Railroad decision. The court listed three factors in determining whether an exclusionary policy violates Title VII. These three factors became know as the Green Factors:

 

  1. The nature and gravity of the offense or conduct

  2. The time that has passed since the offense or conduct and/or completion of the sentence

  3. The nature of the job held or sought

 

An employer must prove that any exclusionary hiring policy has first taken the Green factors into consideration and therefore meets the requirements for being job related and consistent with business necessity.

 

While these factors may seem deceptively simple, the EEOC expects that each one has been considered thoroughly and comprehensively. For example, if an employer decides that any applicant with a fraud conviction in the past 5 years is ineligible for positions dealing with money or customers’ personally identifiable information such as social security numbers or credit card information, the employer will be expected to prove that this particular policy decision was made on the basis of relevant statistics and research on the likelihood of recidivism with the passage of time. If, as an employer, you cannot prove that you took this type of information into consideration when crafting the policy, your policy will fail to pass the Green factors test.

 

Remember, the EEOC takes all of these requirements very seriously and you should too.

 

Unfortunately, even if you are able to prove that your hiring policies do take the Green factors into consideration, you are still not off the hook. The EEOC will then want to see evidence that you are providing “individualized assessments” to applicants who are excluded by these policies.

 

 

 

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