Ex-Convict Hire Hurdle Draws U.S. Suits Against Employers

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Ex-convict Archmiguel "Arch" Murphy left prison for the sixth time in 2010 and landed a job with a reintegration program in Minnesota. Close

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Ex-convict Archmiguel "Arch" Murphy left prison for the sixth time in 2010 and landed a job with a reintegration program in Minnesota.

Destinee Evans says she is striving to move past her 2010 marijuana trafficking conviction. The job market at first made that difficult.

After her October 2012 release following more than two years in prison, she applied for more than a half-dozen jobs. She landed a second interview with a telemarketer -- and then the company checked her background. “They called and told me they didn’t need me,” said Evans, 24.

The U.S. population of former inmates has swelled after incarceration rates more than tripled over the past three decades. Meanwhile, job seekers outnumber openings 2.7 to 1, making it easier for employers to pass up marred resumes.

As companies including Target Corp. and Wal-Mart Stores Inc. remove questions about criminal history from applications, state and local governments are passing laws that could help ex-offenders get job interviews.

The U.S. Equal Employment Opportunity Commission is also scrutinizing hiring practices, saying policies that bluntly screen out former criminals can disadvantage minorities. Suits are pending against a Bayerische Motoren Werke AG U.S. auto plant in South Carolina and Goodlettsville, Tennessee-based Dollar General Corp. Both companies say they follow the law.

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Ex-convict Archmiguel "Arch" Murphy fixes a jammed scrap metal compactor at the Better Futures Minnesota warehouse in Minneapolis. Close

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Ex-convict Archmiguel "Arch" Murphy fixes a jammed scrap metal compactor at the Better Futures Minnesota warehouse in Minneapolis.

Businesses face a conundrum: they must comply with more restrictive rules on treatment of applicants with prior arrests and convictions, yet hiring someone with a record who commits a crime against a customer or colleague could leave them liable.

‘Risky Environment’

“There really is a sense that we need to find ways for people to make a living,” said Elizabeth Torphy-Donzella, a labor and employment lawyer and partner at Shawe & Rosenthal LLP in Baltimore. At the same time, regulation “creates a risky environment for employers.”

Target Corp., the second-largest U.S. discount retailer, said in October that it will bar queries about prior convictions and arrests from job applications. Target still views a background check after a conditional employment offer.

Five states last year created policies prohibiting check-off boxes about criminal history on applications, bringing the total to 10. Another 56 local governments have similar bans, based on an analysis this month by the National Employment Law Project, an advocacy group focused on work-related issues including minimum wage and criminal records.

Some rules apply only to public agencies. In Hawaii, Massachusetts, Minnesota, Rhode Island and 15 localities, private employers must also comply, NELP reports show.

Photographer: Ariana Lindquist/Bloomberg

Ex-convict Archmiguel "Arch" Murphy deconstructs a dehumidifier for scrap metal at the Better Futures Minnesota warehouse in Minneapolis. Close

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Photographer: Ariana Lindquist/Bloomberg

Ex-convict Archmiguel "Arch" Murphy deconstructs a dehumidifier for scrap metal at the Better Futures Minnesota warehouse in Minneapolis.

The momentum is carrying into 2014. In an address this month, Delaware Governor Jack Markell said his state should “ban the box” for government hires.

A Model

“Let’s stop denying ex-offenders their first interview,” said Markell, a Democrat, adding that the state could be a model for the private sector.

“We expect to see more cities and counties that are adopting this,” said Michelle Natividad Rodriguez, a staff attorney for NELP, which estimated in 2011 that one in four U.S. adults had a criminal record, based on Department of Justice figures. “It doesn’t do our communities any good to squash the potential of those people.”

Evans in September began working the front desk at Towards Employment, a Cleveland nonprofit where she took classes following her release. She said her job has enabled her to make a legitimate living, and without it she would have thought of returning to crime to earn money.

“Would I have acted on it? Probably not,” she said, because she has a child and is working toward regaining custody. “It’s hard for a person who’s constantly being told no.”

Criminal History

Rejection concerns Arch Murphy, 48. He left prison for the sixth time in 2010 and landed a job with a reintegration program in Minnesota. As a next step, he’s looking for a janitorial job and has applied for 11 positions. Companies have said they’re open to hiring ex-offenders, yet four asked about criminal history on their applications, he said.

The EEOC issued guidance in April 2012, making it clear that it sees many broad policies against hiring former criminals as having a discriminatory effect based on race, violating the Civil Rights Act of 1964. The commission enforces laws that prohibit discrimination based on race, color, religion, sex, national origin, disability, or age in the workforce, and has authority to investigate and file lawsuits.

The commission said that if the conduct signaled by a record makes someone “unfit for the position in question,” an employer can reject an applicant and justify the action. Unless they can prove it’s a business necessity, companies can’t make hiring decisions solely based on criminal history, because doing so has “disparate impact” on minorities.

Higher Rates

Black men were imprisoned at more than six times the rate of white men in 2010, and Hispanic men at about 2.6 times the rate of white males, based on a Pew Research analysis of Bureau of Justice Statistics data.

The commission has been enforcing the guidance with lawsuits, so it is “going to be an issue that employers need to wrap their heads around” this year, said Lester Rosen, founder of background check company Employment Screening Resources in Novato, California.

Even before the April announcement, EEOC had reached a $3.13 million settlement with PepsiCo Inc.’s bottling unit Pepsi Beverages Co. in January 2012. The commission had said that the company’s background screening policy disproportionately affected black applicants.

Pepsi Response

“We have always maintained a neutral criminal background check policy that included an individualized candidate assessment and the EEOC did not find any intentional discrimination by the company,” Pepsi said in an e-mailed statement. The company worked with the commission to “revise our policy to further advance our efforts to create a workplace that is as diverse and inclusive as possible.”

In the pending civil suits, the EEOC said in a release that the BMW plant’s hiring policy is a “blanket exclusion without any individualized assessment.” Dollar General conditioned all job offers on background checks that screened for certain crimes, “which results in a disparate impact against blacks,” the EEOC said.

BMW “complied with the letter and spirit of the law” and the plant “employs thousands of people, and providing a safe work environment is one of the company’s highest priorities,” spokeswoman Kelly Wamsley said in an e-mail.

Dollar General denies the EEOC’s allegations and its background check “is intended to foster a safe environment for its employees and customers and to protect its shareholders’ assets,” the discount retailer said in a statement.

States Object

Nine state attorneys general sent the EEOC a letter in July, urging it to reconsider the BMW and Dollar General lawsuits and rescind its guidance. Employers may have “business-driven reasons” for not wanting to hire individuals with criminal convictions, particularly for violent crimes, and forcing individual assessments of applicants “will add significant costs” the letter said.

In a response a month later, EEOC Chairwoman Jacqueline Berrien said the commission encourages a two-step process to ensure employers aren’t “mistakenly screening out qualified applicants or employees based on incorrect, incomplete, or irrelevant information.” Since case-by-case assessment is encouraged just on those screened out, it “should not result in ‘significant costs’ for businesses,” she wrote.

Increases Risk

The EEOC stance increases the risk that employers will be sued for bypassing applicants because of their criminal records, said Richard Mellor, senior adviser for asset protection at the National Retail Federation. Companies remain liable if they hire an ex-offender who harms customers or coworkers or steals.

“We’re caught in the middle,” Mellor said. “When you say, ‘Give someone a chance,’ you’re making a decision to increase risk.”  Employers have adjusted hiring practices on their own as applicants with criminal records abound, Mellor said.

About 1 in 35 U.S. adults was incarcerated at a state, federal or local level or on probation or parole in 2012, based on a Bureau of Justice Statistics report. That’s down from a high of 1 in 31 in 2006 and 2007.

Bentonville, Arkansas-based Wal-Mart, the world’s largest retailer, in 2010 decided to remove crime-related questions from applications, spokeswoman Tara Raddohl said in an e-mail.

Offers Chance

“The removal does not eliminate the background check or drug test but it offers those who’ve been previously incarcerated a chance to get their foot in the door,” she wrote.

Minneapolis-based Target said it realized after complying with a new ban-the-box law in its home state of Minnesota that “this shift would not dramatically impact the needs of our business,” and last year moved to implement the change nationwide, spokeswoman Molly Snyder said in an e-mail.

For people like Evans, a chance at steady work can be transformative, she said. “During my time in prison, I learned that I can’t get through life that way; I’m a different person now,” said Evans. “I feel more productive, like I have a purpose.”

To contact the reporter on this story: Jeanna Smialek in Washington at jsmialek1@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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