EEOC Can't Restrict Employers' Use of Criminal Records in Hiring, 5th Circuit Rules

Author: David B. Weisenfeld, XpertHR Legal Editor

August 9, 2019

The Equal Employment Opportunity Commission (EEOC) may not enforce its Obama-era arrest and conviction records guidance against the state of Texas, the 5th Circuit Court of Appeals has ruled.

By state law and the policies of individual state agencies, Texas has long excluded persons with felony convictions from many public jobs. However, the EEOC's 2012 guidance condemned any "policy or practice requiring an automatic, across-the-board exclusion from all employment opportunities." Soon after the EEOC issued its guidance, a jilted job applicant challenged Texas's no-felon hiring policy as having a disparate impact on minority applicants in violation of Title VII of the Civil Rights Act.

Texas countered by suing the EEOC, claiming that its guidance conflicts with state law banning employers from hiring applicants with certain criminal histories for some jobs. In particular, the Lone Star state argued that it had to choose either to consider convicted felons for hire as troopers, jailers and school teachers or else ignore the EEOC's rule and risk an enforcement action.

The district court granted Texas's motion for summary judgment, in part, holding that the EEOC's guidance was a substantive rule issued without notice and the opportunity for comment - thereby violating the Administrative Procedure Act (APA).

In affirming the injunction, the 5th Circuit found that the EEOC's guidance pressures Texas to abandon its laws and policies by condemning no-felon hiring screens. It also held that Texas had suffered multiple injuries from the guidance and therefore had standing to sue.

Many states have moved away from Texas's position in recent years and enacted "ban the box" laws that restrict employers from asking about an applicant's criminal history or conducting a background check until later in the hiring process. In all, 35 states have adopted "ban the box" laws or policies, 13 of which directly affect private employers.

In fact, the City of Austin restricts employers with 15 or more employees from making criminal history inquiries or conducting background checks until after an employer makes a conditional job offer.