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Does Fifth Circuit Ruling Allow Employers to Discriminate Against Ex-Felons?

In 2012, the EEOC issued guidance stating that blanket bans on hiring employees with criminal records disproportionately impact minorities and instructing employers to ensure that their hiring policies link specific criminal conduct to the risks inherent to a particular position. The State of Texas challenged that guidance on the grounds that it should be allowed to categorically exclude felons from certain categories of public jobs and the District Court enjoined the EEOC from enforcing its guidance.

Earlier this week, the Fifth Circuit sided with Texas and upheld the injunction. The court held that the EEOC didn’t follow the proper administrative rulemaking procedures when it issued the guidance (an esoteric process known as “notice and comment”) and, thus, could not enforce those rules. So, what does this mean for employers? Frankly, not much. The court explicitly did not decide whether the EEOC’s criminal background checks were a reasonable interpretation of the law, and only enjoined the EEOC from treating its own guidance as a binding rule in enforcement actions against the State of Texas.

Employers should not assume that this decision makes it okay to use a criminal record as a litmus test. The EEOC has been aggressive in pursuing disparate impact claims based on background checks, and it is possible that it will continue to be even if it cannot treat its guidance as a binding rule. Nor does this case have any effect on any of the local or state “ban the box” laws that restrict asking job applicants about their criminal history (such as those in Austin and California).

Employers should still evaluate applicants’ criminal records on a case-by-case basis. Doing so will help them stay in compliance with the law but may also prevent them from overlooking a qualified job applicant. After all, someone with a conviction for shoplifting is arguably not the best choice for a retail job, but someone caught drinking underage in college may be a great employee regardless.

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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.