Thursday, August 21, 2014

EEOC Successfully “Messes with Texas” Over Criminal Background Checks


It appears you can “mess with Texas” if you’re the EEOC.   As you’ll recall from the March 2, 2014 posting Don’t Mess with Texas Pt. 2, the Equal Employment Opportunity Commission had filed a motion to dismiss the State of Texas’s lawsuit alleging that the federal agency has overstepped its statutory authority by imposing limits on employers’ use of criminal background checks in making employment decisions.  These limits had been imposed under the EEOC’s updated 2012 enforcement guidelines.  In the lawsuit, the State sought injunctive relief to block the EEOC’s enforcement of the guidelines.
On Wednesday, August 20, 2014, a United States District Court Judge dismissed the State’s lawsuit on the grounds argued by the EEOC.  The Court held that Texas lacked standing to challenge the guidelines because there was no current risk of EEOC action against the state and any action by the Court would be premature.  The Court noted:

Importantly, Texas does not allege that any enforcement action has been taken against it by the Department of Justice … in relation to the guidance” [and]  b]ased upon this, the court cannot find a ‘substantial likelihood’ that Texas will face future Title VII enforcement proceedings from the Department of Justice arising from the guidance.

It is important to note that the dismissal of the State’s lawsuit was on a procedural basis and was not a ruling on the merits of the case.  It is not clear at this point whether the State of Texas will seek to appeal the ruling to the United States Court of Appeals for the Fifth Circuit.
In the original lawsuit filed by Texas, it alleged 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.”
The basis of the EEOC enforcement guidelines is the agency’s position 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. 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.
This victory for the EEOC comes after a string of litigation losses for the agency in cases they have filed against employers for alleged discriminatory use of background checks.
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 fijmanm@phelps.com