California Fair Employment and Housing Council Considering Regulations Limiting Consideration of Criminal History

The California Fair Employment and Housing Council has taken the first step to issue regulations that would limit employers' consideration of criminal history.  The proposed regulations expressly incorporate a number of existing laws.  They also explain how "disparate impact" standards will be applied to employer practices regarding criminal records.

Some highlights:

- The regulations expressly incorporate bans on consideration of arrest records that already appear in the Labor Code;
- No consideration of any conviction referred to a pre-trial or post-trial diversion program;

- No consideration of expunged, judicially dismissed, or statutorily eradicated convictions;

- Employers may not take action based on "non-felony" marijuana possession convictions more than two years old.  Unhelpfully, they don't say how the two years is measured (neither does the Labor Code section upon which this provision is based).

- The regulations explain that public sector employers may not consider convictions until after the employer determines the applicant meets minimum qualifications for the job.  This is so-called 'ban the box," meaning that public sector applications cannot ask for conviction information. This provision does not affect private sector applications.

- Local ordinances containing tougher proscriptions (such as San Francisco's) are preserved.

- Employers must ensure consideration of convictions do not impose an "adverse impact" on minorities or others protected by anti-discrimination laws.  However, employers may establish that the consideration of a previous conviction is "job-related and consistent with business necessity."  What does that mean?

The criminal conviction consideration policy or practice needs to bear a demonstrable relationship to successful performance on the job and in the workplace and measure the person’s fitness for the specific job, not merely to evaluate the person in the abstract. In order to establish job-relatedness and business necessity, any employer must demonstrate that the policy or practice is appropriately tailored, taking into account at least the following factors:
(A) The nature and gravity of the offense or conduct;
(B) The time that has passed since the offense or conduct and/or completion of the sentence; and
(C) The nature of the job held or sought.

- Employers have to show that bright-line disqualifications distinguish between applicants and employees that do or do not pose an unacceptable level of risk.  That means there has to be a way to conduct an individual assessment of the applicant notwithstanding the crime.

- Employers that consider convictions older the seven years are subject to a rebuttable presumption that the practice is NOT job-related.

- Employers must give employees a chance to explain a conviction is inaccurate.

- Even if the employer demonstrates its conviction policy is job-related and consistent with business necessity, the applicant can show there are less discriminatory alternatives, "such as a more narrowly targeted list of convictions or another form of inquiry that evaluates job qualification or risk as accurately without significantly increasing the cost or burden on the employer."

- The proposed regulation does not apply when laws require elimination of applicants who are convicted of certain crimes.

The FEHC will be vetting the proposed regulations via a notice and comment period. There will likely be revisions as well. But it appears that California employers will have to conform their policies and practices regarding convictions to new rules in the months to come.  We will keep you posted.

The Council has published more information about the comment period and proposed regulations here. 

Court of Appeal: Summary Judgment Against Plaintiffs Challenging Starbucks' Application

California employers cannot ask applicants to disclose certain convictions for marijuana-related misdemeanors that are more than two years old. Starbucks knew that, and included a disclaimer on the back of its application, viz:

CALIFORNIA APPLICANTS ONLY: Applicant may omit any convictions for the possession of marijuana (except for convictions for the possessions of marijuana on school grounds or possession of concentrated cannabis) that are more than two (2) years old, and any information concerning a referral to, and participation in, any pretrial or post trial diversion program.”

Although that may read like a proper disclaimer, it was included in a larger paragraph of disclaimers located away from the general convictions question, which did not exclude such marijuana convictions. So, the California disclaimer did nothing to stop Erik Lords and his band of merry putative classmembers from filing suit, claiming the application form was defective. Erik and co. wanted about $26 million in penalties. Aggrieved applicants get a penalty of $200 or actual damages for faulty applications.

The court of appeal agreed with the trial court and the plaintiffs that the general disclaimer was improperly placed away from the general convictions question. Had the properly worded disclaimer been placed next to the conviction question, it would have been legally correct, the court said.

But the court of appeal detected a couple of problems with Lords' prayer. [I kill me]. First of all, none of the named plaintiffs had a marijuana conviction. Second, all had read the allegedly hidden language. Third, none was denied employment because of a wrongfully disclosed conviction.

So, the court said:

We see nothing in the statute to support plaintiffs’ claim that the Legislature ntended to protect the privacy interests of job applicants who had no marijuana convictions in their background. As we explain below, we decline to adopt an interpretation that would turn the statute into a veritable financial bonanza for litigants like plaintiffs who had no fear of stigmatizing marijuana convictions.

The case is Lords v. Starbucks and the opinion is here.