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August 10, 2011

Chair Jacqueline A. Berrien

Commissioner Stuart J. Ishimaru

Commissioner Constance S. Barker

Commissioner Chai R. Feldblum

Commissioner Victoria A. Lipnic

131 M Street, NE

Washington, DC 20507

VIA Email To: commissionmeetingcomments@eeoc.gov

RE:       Commission Meeting July 26, 2011, Arrest and Conviction Records as a Barrier to Employment

CARCO Group, Inc. has been providing background screening services as a Consumer Reporting Agency (CRA) for over 33 years.  CARCO appreciates the opportunity to comment on the use of criminal history record information (CHRI) in making employment decisions. CARCO provides background screening services, including CHRI information, to employers in compliance with the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., and the many consumer protections afforded to consumers by the FCRA. CARCO has been accredited by NAPBS as having demonstrated policies and procedures, and trained our staff in those policies and procedures, designed to protect all consumers and to ensure compliance with all applicable law, confirmed by an independent audit.

CARCO shares the concerns of the commissioners and panelists regarding the plight of ex-offenders re-entering the job market.  We firmly agree that that there should be employment opportunities for ex-offenders, and we also agree with the panelists and commissioners who acknowledged that criminal history backgrounds, when properly researched and properly applied, serve a public good protecting assets, employees and the public.

EEOC Guidance.

As discussed below, CARCO believes that employers would benefit from additional guidance from the EEOC, developed with input from consumer reporting agencies and other stakeholders, with respect to how employers should consider CHRI for employment purposes.

We urge the Commission to work with CRAs, employers and other stakeholders to educate employers and to help them make position appropriate decisions.  We want to work with the EEOC as allies in ensuring fair treatment of all job applicants.

There are two classes of employers using CHRI today: those employers using the services of a CRA regulated by the FCRA affording significant consumer protections enforced by the Federal Trade Commission, and those employers who do their own criminal checks, either by accessing the information at the source repository themselves, or more often, using incomplete “instant Internet checks” provided by companies who either do not know or do not believe they are regulated by the FCRA and are not required to afford the same consumer protections.  CARCO deplores the damage done by online, “instant” criminal checks without the protections afforded by the FCRA or careful research of the type undertaken by CRAs such as CARCO in preparing consumer reports for its customers.

Several Commissioners and panelists correctly identified two practices that CARCO agrees should be eliminated: the use of arrest records that do not include current case status or disposition in the employment decision process and the use of information from CHRI databases without the CRA perfecting those records through a records search at the originating repository of record (such as the court where the matter was adjudicated) prior to dissemination. Although permissible under the FCRA (15 U.S.C. §1681k(a)(1)) CARCO does not practice the use of “contemporaneous notice” when utilizing databased CHRI.  CARCO has long declined to report partial or incomplete records for which there is no disposition. Further, CARCO does not include records of dismissal or records with “not guilty” dispositions in the reports we provide to clients. These are reported as “clear” to our clients as if the court proceedings never happened.  Simply stated, we do not report raw arrests or “rap sheets.”  Further, while we find commercial CHRI databases helpful when performing research, we only use those databases as pointers and will only report information after it is perfected by a records search at the originating repository of record.  This research process ensures that expungments, incomplete, or out of date records are not reported to the end-user, i.e. employer.

The Equal Employment Opportunity Commission (EEOC) will hold a meeting on the use of criminal
records for employment screening purposes on Tuesday, July 26, in Washington, D.C. The National
Association of Professional Background Screeners (NAPBS), which we are members of, is preparing
comments for submittal to the EEOC on the relevance and benefits of access to criminal history records
by employers. NAPBS is also partnering with other associations and coalitions as we move toward the
July meeting date. This will be a full Commission meeting, meaning all five Commissioners and EEOC's
General Counsels will attend. This includes Chairwoman Jacqueline Berrien, Commissioner Chai
Feldblum, Commissioner Stuart Ishimaru, Commissioner Vicky Lipnic and Commissioner Constance
Barker. A formal agenda has not yet been released but it is excepted there will be multiple panels
including academics, lawyers, victim's groups (i.e., those who have been denied employment due to
their criminal history), government officials, litigants from the El v. Septa case and others.

Given the importance of this meeting to our industry and you as our client, we want to ensure that you
are aware of this upcoming meeting and have the opportunity to join in our efforts to ensure that the
interests of the providers and users of criminal records are represented. The role of the use of criminal
records in employment screening will be the focus of this meeting and as employers have an important
stake in what is being considered during the meeting, we encourage you to add this date to your
calendar and make plans to attend the hearing on July 26 if possible. The meeting will be open to the
public and it will not be webcast or televised, although a transcript will be available after the meeting.

On May 13th, Georgia enacted a bill (H.B. 87), which will require all private employers with eleven or more employees to use the federal government’s E‐Verify system to check new employees’ work authorization. Employers with over 500 employees must begin using E-Verify by January 1, 2012; employers with 100‐499 employees must begin using E‐Verify by July 1, 2012; and employers with 11‐99 employees must begin using E‐Verify by July 1, 2013.

The city of Philadelphia has joined a growing number of cities and states in imposing restrictions on employer inquiries into criminal history information. On April 13, 2011, City of Philadelphia Mayor Michael Nutter signed Bill No. 110111-A, which will become effective on July 12, 2011. Philadelphia’s new Fair Criminal Record Screening Standards establishes provisions and requirements for the use of criminal history information by city agencies and private employers with 10 or more employees.  The new “ban the box” ordinance complements Pennsylvania’s Criminal History Records Information Act, which restricts employers from refusing to hire an applicant based on their criminal history, unless that history is directly related to suitability for the position in question.

The Philadelphia ordinance goes a step further and specifically prohibits both public and private employers with 10 or more employees within the City of Philadelphia from even asking about an applicant’s criminal history record until after the employer’s first direct contact with the applicant.

According to the Society of Human Resource Management (SHRM), the new ordinance creates three basic restrictions on the use of criminal record histories by employers subject to the act:

1.      Employers may not inquire of applicants or employees about any arrest or criminal accusation that is not still pending and did not result in a conviction.

2.      Employers may not require job applicants to disclose any criminal convictions during the application process through the first “interview,” and if employers do not conduct “interviews,” they are prohibited from gathering any information regarding the applicant’s criminal convictions during the hiring process. (The term “interview” is broadly defined to include “any direct contact by the employer with the applicant, whether in person or by telephone, to discuss the employment being sought or the applicant’s qualifications.”)

3.      Employers may not take any adverse action against an applicant or incumbent employee (e.g., refuse to hire, transfer or promote, or choose to terminate) because of past arrests or criminal accusations that did not result in convictions.

The new ordinance does not entirely prohibit Philadelphia employers from using any criminal record history information, but rather postpones the time frame where such inquiries are appropriate. Employers may continue to conduct background check screening that includes a criminal record history component or inquire about an applicant’s criminal record history, provided that the screening or inquiry takes place after the initial “interview” and does not include information on past arrests or criminal accusations that did not lead to conviction.

In view of the Philadelphia ordinance, employers are encouraged to review their hiring procedures with legal counsel and take steps to modify job applications requiring applicants to disclose their criminal history.

On April 12, 2011, Governor O'Malley signed into legislation the Job Applicant Fairness Act which prohibits most employers from using credit history in determining whether to deny employment to a job applicant, discharge an employee, decide compensation, or evaluate other terms and conditions of employment unless it meets specific timing and job-related requirements.   This law goes into effect on October 1, 2011.

The Act applies to employers of any size, but excludes various financial institutions, as well as employers who are required to inquire into an applicant's or employee's credit history under federal or state law.

Limited exceptions to the Act allow employers to request or use credit information where such information is substantially job related.  This includes positions involving money handling or other confidential job duties.  An employer must disclose its intent to request a credit history check  in writing to the applicant or employee.

In a growing trend, Maryland joins Illinois, Washington, Oregon, and Hawaii as states that prohibit the use of credit information for employment purposes.   Fifteen other states currently have legislation pending along with the federal H.R. 321: Equal Employment for All Act, which will restrict employers' use of credit reports for employment purposes.

Unlike other states, Maryland's law will not provide a private right of action.  Instead, applicants and employees who feel that an employer has violated the Act must file a complaint with the Commissioner of Labor and Industry who will investigate the matter.  Penalties may include a civil penalty of $500 for an initial violation of the Act and up to $2,500 for repeat violations.

Employee Credit Privacy Act (H.B. 4658)
Signed into Law on: August 10, 2010
Effective Date:  January 1, 2011

Illinois has become the most recent state to react to the effect of the impact on the economic downturn on employees’ credit histories by restricting employers from using credit information in employment decisions.

Details of the Act:

• Prohibits most employers from using an applicant’s or employee’s credit history as a factor in any employment decision, including hiring, discharging and terms of employment.
• Prohibits employers from inquiring into an applicant’s or employee’s credit history or obtaining a credit history report from a consumer reporting agency.
• Restricts use of a broad range of credit information regardless of the source of such information; it is NOT limited solely to information obtained from a consumer reporting agency.
• Applies to employers of any size.
• Employers may not retaliate or discriminate against a person for exercising rights under the Employee Credit Privacy Act.
• Employers who violate the Act may be sued and ordered to pay damages including attorneys’ fees.
• Does not allow waivers of the Act’s rights and invalidates any such waivers that exist.

Specific Exclusions:

• Many government employers
• Banks
• Savings and loan associations
• Other financial institutions
• Debt collectors
• Insurance companies
• Surety businesses

Limited Exceptions:
Bona fide occupational qualification (BFOQ):  The Act provides limited exceptions that allow employers to use credit information where such information is related to a bona fide occupation qualification for a particular position or group of employees. This exception applies generally to those positions involving money-handling or other confidential job duties, such as:

• those that require bonding by state or federal law;
• employees who have unsupervised access to cash or certain assets valued at $2500;
• employees who have signatory power of $100;
• employees who are in a managerial position which involves setting direction or control of the business; and
• employees who have access to confidential information, financial information or trade secrets.

Passed on March 12, 2010, House Bill 5411 (Rep. William Burns, D-Chicago) amends the Medical School Matriculant Criminal History Records Check Act.  Criminal history record checks are required by law for students applying to medical school and were previously conducted by the Illinois State Police. This bill allows medical schools to use a criminal history record check entity approved by the State, as an option. There are concerns there may be out-of-state incidents in an applicant’s history not easily identifiable by the state police. Each requesting medical school is solely responsible for any fees associated with using the entity.

Dover – The Delaware Division of Motor Vehicles' has placed Comfort Ride Express Inc. of Lewes on Administrative Probation based on findings of a recent investigation associated with the death of a Lewes woman.

The DMV investigation was prompted by allegations that the individual accused of murdering a Lewes woman in November, 2009 was a valid driver working for Comfort Ride Express and had a criminal history that should have prevented him from working in such a capacity.

Questionable behavior of some wannabe stars has the reality TV industry rethinking its vetting processes.

Reporting from Los Angeles and New York - Michaele and Tareq Salahi were a reality TV producer's dream. Until they became a nightmare.

FAYETTEVILLE, Ark. -- 40/29 News has learned that a former University of Arkansas employee, accused of breaking into a fraternity house, had a checkered past -- including a past arrest for sex crimes.

But at the time of his employment, his criminal past was never reviewed. And many are wondering how did he slip through the cracks?

On August 26th, a federal district court in Maryland upheld DHS’ E-Verify federal contractor rule and dismissed a Chamber of Commerce lawsuit to halt the implementation of the rule. The court held that contracting with the federal government is voluntary, thus they are not required to participate in the E-Verify system. The court further held that E-Verify is not limited to employment verification of new hires, since the Congress could have explicitly prohibited such an application, but did not. The ruling allows for the implementation of the E-Verify requirement for federal contractors to go into effect as scheduled on September 8, 2009.

(Source: Chamber of Commerce of the United States, et al. v. Napolitano, S.D. Md., Civil Action No. AW-08-3444, 8/26/09)