August 22, 2018

New Law:  On January 1, 2018, California’s Ban-the-Box Law took effect, prohibiting all California employers with five or more employees from asking job applicants about their criminal history until the later stages of the application process.  The purpose of the law is to encourage employers to assess each applicant’s fitness for the job, rather than denying employment because the applicant checked a box indicating he/she had been convicted of a felony (hence the name of the law).  The new law amends California’s Fair Housing and Employment Act (FEHA) which bars numerous forms of discrimination.  [See new Gov. Code § 12952.]

Once the employer makes a conditional offer of employment, the employer may inquire into the applicant’s conviction history.  Employers may not ask about, or consider, arrest records, diversion programs, sealed records, non-felony convictions for marijuana possession that are more than two years old, or juvenile records.

Before denying employment based on an applicant’s conviction record, the employer must consider whether the conviction has a direct and adverse relationship with the specific job duties of the position.  At a minimum, the employer must consider:

• The nature and severity of the offense;
• How long it has been since the applicant committed the offense and served his/her sentence; and
• The nature of the job for which the applicant is applying.

If, after completing this inquiry, the employer decides not to hire the applicant, the employer must provide the applicant with a written notice of the decision, including:

• Specifying the conviction that was the basis for the decision;
• Providing a copy of the criminal conviction history report, if one was obtained; and
• Explaining the applicant’s right to respond with favorable evidence by a certain deadline that is at least five business days after the notice.

After receiving any input from the applicant, the employer can make a final decision.  If the final decision is to deny employment, the employer must provide the applicant with written notice of the denial, the procedure for challenging the denial if the employer has such a procedure, and the right to file a complaint with the California Department of Fair Employment & Housing (DFEH).

What should you do if you learn that an employee lied about a criminal conviction?
The federal court has held that an employer is not liable for discrimination in firing an employee for lying about a criminal record.  However, if you fire an employee, or refuse to reinstate an employee, because of assumptions about the employee’s mental illness, the employer may run afoul of the Americans with Disabilities Act (ADA).

Example: Josephs v. Pacific Bell: When Joshua Josephs applied for a service technician position at Pacific Bell Telephone (“PacBell”), he indicated he was never convicted of a felony or misdemeanor.  After Josephs was hired for the position, which required him to install and repair phones unsupervised in homes, PacBell discovered that Josephs had been found not guilty by reason of insanity for attempted murder 15 years earlier.  He had spent several years in a state mental hospital as a result.  Three years later, Josephs was convicted of misdemeanor battery on a police officer. PacBell discharged Josephs for making fraudulent entries on his job application and withholding information, both of which violated the company’s code of conduct.  [Josephs v. Pac. Bell (9^th Cir. 2006) 443 F.3d 1050.]

PacBell then refused Josephs’ application for reinstatement, even though PacBell had previously reinstated other employees who lied about their criminal records.  PacBell claimed that Josephs’ situation was different because Josephs had spent time in a “mental ward,” and they were worried he might “go off” on a customer.  Josephs sued PacBell, alleging that the failure to reinstate him due to his mental disability was a violation of the ADA.

What the Josephs Court said:  Although it was lawful to terminate Josephs for dishonesty on his application, PacBell was held liable for discrimination in refusing to reinstate him based on assumptions about his mental disability.  The Court held that:

• An employee can state a claim under the ADA for failure to reinstate, even if the initial discharge was legal.
• PacBell considered Josephs unfit for any job in the company, not just jobs requiring access to customers’ homes.
• Josephs’ past violent acts did not make him automatically unqualified for the job, since he had a good performance record in a similar position at another company for the past 10 years.
• While an employer may refuse to employ someone based on a history of violence if that person poses a direct threat to others, PacBell did not assess the risk of harm that Josephs posed in this situation.
• PacBell did not have a written policy prohibiting employing persons who committed violent acts, and had in fact reinstated a service tech who had a felony domestic violence conviction.

What if the employee did not lie about the criminal convictions?  Even if the employee admitted the criminal misconduct, the employer can properly fire the employee for that misconduct so long as the firing did not arise from improper motives such as racial or disability-related discrimination.

Because arrest and incarceration rates disproportionately impact some protected racial and national-origin groups, an employer who adopts a blanket policy of excluding any applicant or employee with a criminal record could arguably be guilty of unlawful discrimination.  The Equal Employment Opportunity Commission (EEOC), the agency that enforces federal discrimination laws, has issued guidance on how employers can screen out applicants whose criminal records pose an unreasonable risk without engaging in unlawful discrimination.  [EEOC, Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, As Amended, 42 U.S.C. § 2000e et seq.  (April 25, 2012), available online at https://www.eeoc.gov/laws/guidance/arrest_conviction.cfm.]

The ADA regards drug addiction, under some circumstances, as a disability that falls within the ADA’s protection. Employees have made claims against employers alleging that they received adverse treatment due to their addiction “disability.”

Example: Bryan v. Wal-Mart Stores:   A pharmacist had been suspended by the pharmacy board for forging prescriptions, subsequently had no pharmaceutical license for five years, and then was reinstated by the pharmacy board shortly before being hired by Wal-Mart in 2007.  After four years of employment at Wal-Mart, he was fired when Wal-Mart began a new credentialing policy and learned of his forgeries and license suspension. The pharmacist sued Wal-Mart, alleging that Wal-Mart actually fired him because he was a former drug addict (which had prompted the prescription forgeries) and that Wal-Mart therefore violated the ADA.  [Bryan v. Wal-Mart Stores, Inc. (9^th Cir. 2016) 669 Fed.Appx. 908.]

What the Bryan Court said:  The 9^th Circuit Court of Appeals held that Wal-Mart was not liable under the ADA.  The pharmacist’s argument failed because the ADA draws a distinction between addiction disability (which is protected) and addiction-related misconduct (which is unprotected), and the forgery charges arose from the latter, not the former.

What you can do when you learn that an applicant or employee has a criminal record:

• Do not rely on assumptions or stereotypes:  Make an individual assessment of the situation, and have a professional evaluate the person’s fitness to perform the job.  Be sure to provide the evaluator with a detailed job description, including any psychological and/or safety requirements.
• Be consistent:  If your company has a policy prohibiting employment of individuals who have been convicted of crimes, be sure to apply it consistently.  Review the EEOC guidance on such policies (discussed above).
• Conduct background checks:  Make any job offer conditional upon receiving acceptable results from a background check.  Be sure to obtain the results before allowing any new hires to start work.
• Make sure you comply with Government Code section 12952, discussed at the top of this article, including the requirement to provide written notice to applicants of the decision not to hire them due to their criminal record.

Need more information?
ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net).  Please visit our website at eskridge.hv-dev.com.

This article is based on the law as of the date posted at the top of the article.　This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.