Arrests, Convictions, and the FEHA: When Does it Hurt to Ask?
By Calvin Chang, Esq.
Some employers would be surprised to learn that liability for employment discrimination on the basis of race can be established from a policy or practice of asking job applicants about prior arrests and convictions. Adverse employment actions, including denial of employment and promotions, based on prohibited inquiries, can cause an employer to run afoul of the California Fair Employment and Housing Act (FEHA). The U.S. Supreme Court has held that an individual belonging to a race that has a disproportionately higher rate of arrests and convictions may bring a cause of action for disparate impact discrimination. In order to avoid liability for disparate impact discrimination, an employer must adhere to statutory prohibitions against certain inquires, and ensure that any inquiry relating to past arrests and convictions is justified by a showing of job related business necessity. California employers are only permitted to inquire about the prior criminal history of job applicants and employees under certain circumstances. As such, a blanket policy of “no arrests and convictions” will be an unlawful practice under the FEHA.
Under Cal. Gov’t Code section 12940(a), it is “unlawful for an employer to refuse to hire or employ a person or to refuse to select a person… or to bar or to discharge a person from employment… or to discriminate against a person in compensation or in terms, conditions, or privileges of employment” (because of one of the enumerated protected basis). There are two types of employment discrimination - disparate treatment and disparate impact. Under disparate treatment, it is unlawful to disqualify a person of one race for having a conviction or arrest record, while not disqualifying a person of another race. “Disparate impact” discrimination occurs, when regardless of motive, a facially neutral employer practice or policy, bearing no manifest relationship to job requirements, has a disproportionate adverse effect on members of the protected class. Under disparate impact, an employer’s policy denying employment based on the existence of past convictions could be discriminatory, if persons of that race are disproportionally more likely to have criminal convictions.
DISPARATE IMPACT DISCRIMINATION
For employment discrimination under the FEHA, a plaintiff must prove that: (1) he was a member of a protected class, (2) he was qualified for the position he sought or was performing competently in the position he held, (3) he suffered an adverse employment action, such as termination, demotion, or denial of an available job, and (4) some other circumstance suggests discriminatory motive (Guz v. Bechtel Nat. Inc.). A disparate impact analysis falls under the fourth requirement, turning on the issue of “other circumstances.” In Griggs v. Duke Power, the U.S. Supreme Court held that a plaintiff must show that a challenged policy discriminates against members of a protected class. The employer can overcome the showing of disparate impact by showing a “manifest relationship” between the policy and job performance.” The second step became known as the “business necessity” defense. The plaintiff can still overcome the business necessity defense by showing that an alternative policy exists that would serve the employer’s legitimate goals as well as the challenged policy with less of a discriminatory effect.“ It is this analysis that must guide any employer inquiry into the past arrests and convictions of an applicant or employee.
Disparate impact can exist when an applicant’s protected class is disproportionately more likely to have a criminal record because the class has been subjected to circumstances that have resulted in higher incidents of arrests and convictions. Courts and the U.S. Equal Employment Opportunity Commission (EEOC) have relied on statistical evidence to establish a prima facie case of discrimination against Blacks, where arrest records are used in employment decisions. For example, according to the California Department of Justice, in 2007, Blacks constituted 17% of all arrests (Blacks constituted 6.7% of California’s population reported in the U.S. Census.) Hispanics accounted for 41% of arrests and 36.6% of population. Whites accounted for 35.6% of arrests and for 42% of population. Thus, policies by employers that exclude candidates across the board, based on past arrest and convictions, would have a disparate impact on Blacks and Hispanics. Analogous Title VII cases apply in recognizing that a facially neutral selection criterion having a disparate impact is applicable to claims under the FEHA. Similarly, the EEOC Guidelines for selections procedures relative to adverse impact on employment opportunities on a basis enumerated in the FEHA, have been adopted by the California Fair Employment and Housing Commission (FEHC).
The prohibition against a blanket policy of “no arrests and convictions” applies, even despite any lack of finding that an employer had any purpose or history of discrimination. Even a “bottom line” showing of one minority group's adequate representation in a job category, does not excuse an employment practice that has a discriminatory impact on members of that group. Employers should also be cautioned that disparate impact discrimination also applies to actions undertaken to impose “invidious criteria” on the employees of its contractors - that result in unlawful employment practices against employees under their control. In Caston v. Methodist Medical Center, an African-American janitorial worker, who had two prior felony convictions, brought a Title VII racial discrimination action against the hospital at which he had worked, after the hospital informed the contractor that it would not accept Plaintiff or any others with felony convictions. The court addressed the issue of third party interference liability, holding that the common law “right to control” test applied to these facts.
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mental disability, medical condition, marital status, sex, age, or sexual orientation.
 Federal Controlled Substances Act (21 U.S.C. § 830(e)(1)(G)) permits retail pharmacies to ask applicants whether they had ever been convicted of any crime involving controlled substances, “notwithstanding state law.” See also, Securities Exchange Act (15 U.S.C.A. § 78a, et seq.), records of arrests for larceny for employees of brokerage firms.
 Starbucks Corp. v. Superior Court, 168 Cal.App.4th 1436, 86 Cal.Rptr.3d 482, at 488.