Sunday, March 2, 2014

“Don’t Mess with Texas Pt. 2” The EEOC Fires Back Over Criminal Background Checks

Back in November 2013, I posted about the State of Texas suing the Equal Employment Opportunity Commission (“EEOC”), alleging that the federal agency has overstepped its statutory authority by imposing limits on employers’ use of criminal background checks in making employment decisions. 

The EEOC has now moved a federal court in the Northern District of Texas to dismiss the State’s case.  Strategically, the EEOC is trying to procedurally kill the State’s  lawsuit before it be judged on the merits.

It has been well over a year since the EEOC issued strict enforcement guidelines, seeking to limit employers’ ability to make employment decisions based on an individual’s criminal history. The stated rationale for the EEOC’s position is that employers’ reliance on criminal records as a factor in hiring decisions disproportionately affects minorities, who statistically have higher rates of arrest and criminal conviction, and has a disparate impact in violation of Title VII of the Civil Rights Act (“Title VII”). While not completely banning the use of background checks, the EEOC guidelines place a burden on employers to prove that such reliance is based on business necessity.

The lawsuit by the State of Texas alleges that the EEOC “purports to limit the prerogative of employers, including Texas, to exclude convicted felons from employment” and that the State of Texas and “its constituent agencies have the right to impose categorical bans on the hiring of criminals, and the EEOC has no authority to say otherwise.”

On January 27, 2014, the EEOC filed its Motion to Dismiss, alleging that: (1) the federal court lacks jurisdiction because the EEOC’s “guidance lacks legal effect”, (2) the State of Texas lacks standing to bring the suit, and (3) that none of the State’s claims are “ripe”.

As to the first argument, the EEOC seems to be engaging in circular logic and trying to have its cake and eat it too.  As I pointed out in my initial post, one of the complaints about the EEOC’s hard-nosed guidelines is that Congress has never granted the federal agency such rulemaking authority, and that the guidelines were an illegitimate exercise of authority.  In its Motion, the EEOC argues that since the guidelines ostensibly lack legal effect, i.e. employers are not legally required to follow them, the federal court has no jurisdiction to rule.  In my opinion, the EEOC is being disingenuous and too cute by half, and the court is unlikely to be amused.  If the EEOC’s “guidance lacks legal effect”, someone should please tell the companies that the EEOC has recently sued over their criminal background check policies, such as Dollar General and BMW, which I’ve discussed in earlier posts.

The rest of the EEOC’s arguments essentially argue that the State has no standing to contest the guidelines because it cannot prove “it has suffered a concrete injury” and lastly that the EEOC has not taken a “final agency action” and as such, any action by the federal court would be premature.

In a non-dispositive ruling on February 14, 2014, the federal court granted the State of Texas an extension of time, up until March 4, 2014, to respond to the EEOC’s Motion.

While I’m always reluctant to make prognostications about what a judge will do, in this case, I am going to go out on a limb and predict that the federal court in Lubbock, Texas will deny the EEOC’s Motion.  Other federal courts have recently handed the EEOC defeats over these guidelines and I don’t expect a Texas court will be shy about responding to the EEOC’s request for them to “butt out”.  I’ll keep you updated.

Mark Fijman is a labor and employment attorney with Phelps Dunbar, LLC, which has offices in Louisiana, Mississippi, Florida, Texas, Alabama, North Carolina and London. To view his firm bio, click here. He can be reached at (601) 360-9716 and by e-mail at