EEOC Informal Discussion Letter

The U.S. Equal Employment Opportunity Commission

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.

Title VII: Use of Conviction Records and the S.A.F.E. Act

September 22, 2010

Dear:

This letter is in response to your inquiry, dated August 31, 2010, to Chair Jacqueline A. Berrien of the U.S. Equal Employment Opportunity Commission (EEOC or Commission). Chair Berrien referred your inquiry to the Commission's Office of Legal Counsel.

As stated in your letter, members of _______________ have concerns that the state registration and licensing requirements of the recently-enacted Secure and Fair Enforcement for Mortgage Licensing Act, 12 U.S.C. § 5101 et seq. (S.A.F.E. Act), conflict with the Commission's policy regarding the use of conviction records in employment decisions. As you know, the Commission enforces, among other laws, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq.(Title VII), which prohibits employment discrimination on the bases of race, color, national origin, religion, or sex.

Title VII of the Civil Rights Act of 1964 and Conviction Records

Title VII does not directly address employers' use of conviction records to screen job applicants and employees. However, Title VII "disparate impact" analysis has long been used to challenge as discriminatory employer policies or practices of excluding applicants or employees due to criminal convictions.¹ If such policies or practices have a disparate impact on members of a protected group – e.g., if they disproportionately exclude applicants or employees of a particular race or national origin – they are lawful under Title VII only if they are "job related and consistent with business necessity" for the position in question.² To meet this standard, Commission policy recommends that employers consider the following factors with respect to both the conviction and the job:

• the nature and gravity of the offense(s) for which the applicant was convicted;
• the time that has passed since the conviction and/or completion of the sentence; and
• the nature of the job held or sought.³

In some industries, employers are subject to federal or state laws and regulations that prohibit individuals with certain convictions from holding specific positions, or engaging in certain occupations. Title VII does not override such federal laws and regulations, but Title VII does preempt state and local laws to the extent they "purport[] to require or permit the doing of any act which would be an unlawful employment practice" under the statute. 42 U.S.C. § 2000e-7.

The S.A.F.E. Act

The S.A.F.E. Act provides that ". . . an individual may not engage in the business of a loan originator without first obtaining and maintaining annually a registration as a registered loan originator, or a license and registration as a State-licensed loan originator. . . ." 12 U.S.C. § 5103(a). The Act further mandates that applicants seeking a State license and registration undergo a State and national criminal history background check. Id. § 5104(a). To be eligible for the license and registration, applicants must not have been convicted of any felony within the preceding seven years or convicted of felonies involving acts of fraud, dishonesty, breach of trust, or money laundering at any time prior to the date of the application. Id. § 5104(b).

As noted above, Title VII does not override federal laws or regulations. Therefore, to the extent that the S.A.F.E. Act's registration and licensing standards might be inconsistent with the Commission's policy regarding the use of conviction records as employment screens, the S.A.F.E. Act's provisions would control. However, Title VII-covered employers still must follow the S.A.F.E. Act's registration and licensing requirements without regard to an applicant's race, color, religion, sex, or national origin. In addition, before excluding applicants based on a disqualifying criminal record, employers should give applicants a reasonable opportunity to dispute its validity and correct any inaccuracies.⁴ Furthermore, if a state enacts licensing and registration requirements that go beyond the minimum standards in the S.A.F.E. Act, such provisions will be subject to scrutiny under Title VII because Title VII preempts state and local laws to the extent they "purport[] to require or permit the doing of any act which would be an unlawful employment practice" under the statute. 42 U.S.C. § 2000e-7.

We hope that this information is helpful to you and the members of the______. This letter is an informal response to your inquiry and is not an official opinion of the EEOC. If you have further questions, contact me at 202-663-4609 or Carol Miaskoff, Assistant Legal Counsel, at 202-663-4645.

Sincerely,

Peggy R. Mastroianni
Associate Legal Counsel

Footnotes

¹See, e.g., El v. Se. Pa. Transp. Auth., 479 F.3d 232 (3d Cir. 2007); Green v. Missouri Pac. R.R., 523 F.2d 1290 (8th Cir. 1975); Gregory v. Litton Sys. Inc., 316 F. Supp. 401 (C.D. Cal. 1970). See also EEOC Policy Guidance No: N-915, "Policy Statement on the Issue of Conviction Records Under Title VII of the Civil Rights Act of 1964" (Feb. 4, 1987); EEOC Enforcement Guidance No: N-915, "Policy Statement on the Use of Statistics in Charges Involving the Exclusion of Individuals with Conviction Records from Employment" (July 29, 1987); EEOC Policy Guidance No: N-915-061, "Policy Guidance on the Consideration of Arrest Records in Employment Decisions Under Title VII" (Sept. 7, 1990); and EEOC Compl. Man. No: N-915, Section 15: "Race & Color Discrimination" (Apr. 19, 2006).

²Griggs v. Duke Power Co., 401 U.S. 424 (1971). 42 U.S.C. § 2000e-2(k)(1)(A)(i).

³ See supra note 1, the Commission's policy documents, which discuss the consideration of these factors.

⁴See, e.g., Interstate Identification Name Check Efficacy: Report of the National Task Force to the U.S. Attorney General, NCJ 179358, 21-22 (Sacramento: SEARCH Group, Inc., July 1999), available at http://www.search.org/files/pdf/III_Name_Check.pdf (the report found that in a sample of 82,601 employment applicants, 4,562 of these individuals were inaccurately indicated by a "name check" to have criminal records. This represents approximately 5.5% of the overall sample).

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