“HUH?!”

That is the understandable reaction of the majority of American business owners, managers, and HR professionals to the recent EEOC decision to ‘recommend’ that employers refrain from asking applicants about their criminal history on employment applications.  In other words, via the EEOC’s ‘recommendation,’ employers should not concern themselves with a potential employee’s criminal past – regardless of what that past entails.  But, how’s that supposed to work when the rest of the world continues to consider employers responsible for who they hire?

American businesses, some of which have been successfully sued for hiring individuals who have then committed criminal acts while under said business’ employ, have been left shaking their heads.  After all, the legal system has ruled time and time again that businesses themselves are liable for any harm that comes to company employees and/or those with whom employees interact.  To wit, if an employee harms someone while on the job (other employees, customers, clients, etc.), it is not just the employee, but the employer as well who will be held responsible for the harm caused by the employee.  The harmed party has to recover damages from someone, and employees rarely have the resources to compensate victims of crime…. but businesses do.

It’s Called Negligent Hiring, Folks
Most businesses are painfully aware of what can happen if someone under their employ commits a crime.  According to an article published in the Journal of Small Business Management entitled Negligent Hiring: Headaches for the Small Businessperson, such lawsuits have been successful against the employers of bartenders, janitors, drivers, police, hospital personnel, managers, and more.  The article states:
Often the basis of these lawsuits is a claim that in the hiring process the employer was negligent in some way in making employment decisions. The alleged negligence may arise from the employer’s failure to make sufficient inquiry when hiring an employee or additionally may arise if the employer retains an employee when he or she knew or should have known that the employee might have the propensity to injure another person.

The EEOC Catch-22
So, if American businesses are to understand the situation properly, hiring managers should not worry about legal liability if someone they hire commits a crime, right?  Unfortunately, the opposite is true.  Employers will continue to be held responsible for crimes committed by their employees, whether they follow the EEOC’s recommendation to the letter or not.  In fact, any employer who follows this sorely misplaced recommendation is likely to find they’ve landed in a heap of trouble.  Again according to the article in the Journal of Small Business:
The most common employer mistake that leads to liability for negligent hiring and retention is the failure to adequately investigate the background of an applicant when hiring certain types of employees. Most courts have held that background checks are not mandatory prior to an employment decision; however, if circumstances exist that should cause suspicion about an employee’s fitness, the employer has a duty to investigate that suspicion.

Instead, the EEOC have created a Catch-22 for employers.  Don’t ask about employment history and risk being sued.  Run background checks and risk getting sued.

Things that Make You Go Hmmm….
The legal position regarding negligent hiring isn’t new.

In May 2012, a female employee filed a negligent hiring lawsuit against a Roanoke, Virginia, employer after she was sexually assaulted in the employer’s parking lot by another employee who turned out to be a registered sex offender.  In 2008, an accident occurred because a truck driver, apparently coming off drugs, fell asleep at the wheel and lost control of his truck. The driver drove the truck off the road, killing another truck driver who was inspecting his brakes on the shoulder of the highway near Ashland, Oregon. A jury awarded damages of $5.2 million to the victim’s four adult children. The fault was assigned to the driver, Daniel Clarey, his employer Washington Transportation, and also to Heyl Logistics, the broker that provided the load.

But, if the legal system continues to lay the blame for the criminal acts of employees on employers, then shouldn’t the EEOC weigh that issue with their recommendations?

One would assume so.

The Errant EEOC
Since neither logic nor transparency (the EEOC issued their new guidelines without giving American businesses or the American public a chance to weigh in) played a role in the new EEOC guidelines, one has to wonder what they were thinking.  Even the U.S. Commission on Civil Rights isn’t all in on the new EEOC recommendations, citing the unenviable position of employers who have to balance the safety of other employees and customers with avoiding violating Title VII.

Interestingly, since, statistically, background checks seem to bolster hiring decisions regarding minorities, the EEOC appear to be hurting those they profess to protect.

All this aside, what gives the EEOC the right to issue such guidelines?

Nothing.

Although arguably well meaning, the EEOC have way overstepped their own boundaries on this one.  The EEOC have no authority to issue or interpret laws.  According to the EEOC’s own website, the agency have been entrusted with “…the authority to investigate charges of discrimination against employers who are covered by the law. Our role in an investigation is to fairly and accurately assess the allegations in the charge and then make a finding.”

To make matters worse, EEOC Commissioner Constance S. Barker stated:
… we are an enforcement agency; we have the authority to issue, amend, and rescind procedural regulations. We have no authority to make substantive changes to the law by issuing guidance that goes beyond what is contained in the statutes as interpreted by the court. Our job is to call congressional intent interpretations, not make new law. No matter how well intentioned we may be. No matter how much a change in law may be warranted. We simply lack the authority to make those changes to the issuance of guidance. It is congress’s job, not ours to weigh the pros and cons proposed in legislation and approve or disapprove it in congress. We are not part of the legislative branch. It is the job of the court to interpret the laws that congresses pass. We are not the courts; we are not part of the judicial branch. It is our job to explain what is already the law, not to expand it, no matter how much some of us may want Title VII to provide additional protection. We cannot use our authority to issue new guidance to create new rights of protection that Title VII does not provide; if we think Title VII should be expanded, we should make our concerns known to congress, not take it upon ourselves to do congress’s job.

That’s a pretty strong statement by one of the EEOC’s own.

The EEOC vs. Kaplan Higher Education Corporation (“Kaplan”)
In December 2010, the EEOC set the stage for the recent recommendation by trying their edicts in federal court. The EEOC filed a lawsuit against Kaplan alleging that Kaplan’s use of credit checks as part of its background checks for job applicants and employees violates Title VII of the Civil Rights Act of 1964 (“Title VII”). Kaplan, however, hasn’t taken the motion lying down, and businesses across the nation are watching intently for the results of the case.

Kaplan, in response to the suit, has filed motions to force the EEOC to disclose its own employment practices regarding background checks, specifically regarding the EEOC’s own guidelines for job’s that have been designated as “public trust” or “national security” positions. Kaplan performs checks based on these designations and so does the EEOC, but the EEOC argues that Kaplan has no right to do so.

And, here’s the real zinger…

“The United States Supreme Court has recognized that background check investigations serve legitimate business purposes for employers.”

Who is the EEOC to argue with the highest court in the land?

The bottom line is that the EEOC have turned down a dangerous path. The agency was supposed to provide new guidance on credit reports on 4/25/2012, not background checks; it’s now apparent why they did not.

The EEOC, by shutting out American businesses and the American public, have sent a message that the EEOC, and the EEOC alone, is solely qualified to issue legal rulings on issues that the government itself has refrained from making.

The EEOC, by failing to gather evidence and statistics that pertain to the issue, have made a rash decision that will prove embarrassing at best and dangerous at worst.

The EEOC, by issuing guidelines at a time when they were obviously unprepared to do so, and were, in fact, more prepared for a retirement party, have caused more harm than not to the individuals it professes to protect.

The EEOC, by making a recommendation that places an undue burden on employers, have opened employers up to increased liability from both job applicants and potential negligent hiring lawsuits as well as muddy the waters for employers trying to abide by state hiring regulations.  The guidelines also strip employees and consumers of their rights to safe harbor.

Do as I Say, Not as I Do
Interestingly, the EEOC is attempting to hold Kaplan to task for engaging in the same employment and pre-employment practices they do. Given that the EEOC clearly believes that such background checks are valuable, it’s difficult to understand why they are electing to engage in a do-as-I-say-not-as-I-do way of implementing the nation’s trust.

The EEOC are hurting job creation when the country can least afford it.  The EEOC might believe they are helping minorities when, in fact, they are doing the exact opposite; not just for minorities but for ALL Americans.