Nonprofits Insurance Alliance

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Background Checks and Ban the Box in California

Historically, it has not been uncommon for risk-adverse employers to adopt policies prohibiting the hiring of applicants with a criminal history. Given that one in seven Americans has some sort of criminal history, numerous states and local jurisdictions are passing legislation that makes it more likely employers will consider these applicants. Increased employment opportunities have been shown to reduce the likelihood of recurring offenses for workers with a criminal record, and help these individuals re-integrate into our communities.

Key to these legislative efforts are “Ban the Box” laws, which generally prohibit employers from inquiring about criminal history on the employment application. Nine states and more than 15 cities have adopted Ban the Box laws that apply to private sector employers, with many more jurisdictions applying these laws to government contractors.

California jumped on the ‘Ban the Box’ bandwagon with Assembly Bill 1008, effective January 1, 2018. Modeled after the City of Los Angeles’ Fair Chance Ordinance, this new California law prohibits employers with five or more employees from inquiring about criminal history until a conditional offer has been made. Ban the Box laws don’t prohibit employers from considering criminal history, but rather create a process establishing the timing of when the criminal history can be considered. There are limited exclusions under California’s Ban the Box law, including for positions where an existing law requires criminal background clearance.

Under the California Ban the Box law, an employer must make an individualized assessment of whether an applicant’s criminal history is acceptable or not. It also outlines a process by which the applicant can dispute the accuracy of the criminal history, and provide evidence of rehabilitation or mitigating circumstances for the employer to consider. Employers are required to provide notice of their decision, and grant an opportunity for the applicant to respond, before making the decision final.

While the Ban the Box law is a recent addition in some states, the requirement that employers conduct an individualized assessment of applicants with criminal histories is not. In 2012, the federal Equal Employment Opportunity Commission (EEOC) adopted Enforcement Guidance for employers considering denying employment based on criminal records. These guidelines were founded on studies which demonstrate that criminal record databases are inaccurate or incomplete, and that using criminal history as a basis to deny employment creates the potential for disparate impact of individuals based on factors such as race, which is unlawful under Title VII of the Civil Rights Act.

The EEOC guidance lays out a process for employers to conduct an individualized assessment of whether, based on the job, there is a business necessity to exclude an applicant with a particular criminal conviction, which includes a review of the nature and gravity of the offence, the time that has passed since the conviction or completion of the sentence, and the nature of the job sought.

Many states, including California, have similar regulations or guidance on this issue, including laws that limit an employer’s ability to use certain types of criminal records, such as arrest records, juvenile records, or certain low-level marijuana convictions. Additionally, the Fair Credit Report Act (FCRA) and similar state laws, require employers to obtain written permission to search the criminal records history of employees and applicants, and to follow additional notice procedures if a criminal record is being used to deny employment.

When it comes to criminal background checks and Ban the Box laws, the key take away for employers is to review all laws applicable to their workers’ in the jurisdiction in which they work, and to create checklists and standardized forms to ensure compliance.

Claims That Could Have Been Avoided: The Ill Effects of Poor Communication

A lack of communication can be detrimental to businesses and organizations alike, as well as the working relationship between employees, as it elevates stress levels and undermines confidence. However, as one nonprofit learned, that’s not the full extent of the damage that can result from poor communication. Poor or absent communication can end up costing tens of thousands of dollars. To learn just how damaging it can be, read below for one nonprofit’s experience.

The Claim

A nonprofit offering recovery services hired a short-term, part-time employee to their staff. The employee was given a verbal offer, as opposed to a written offer letter, and was under the impression that she would be in a position that would receive supervised hours, which she needed in order to obtain a professional license. Instead, the insured had hired her into a position that did not have the desired supervision, as she had understood. Once the employee began work, she complained that she was not being supervised, but nothing was done because she had been hired into a role that did not include supervised hours. Additionally, she objected to the client medication dispensing procedures and refused to perform this function.

After being employed for a mere six weeks and working just 48 hours, the employee’s job was terminated because: 1. the nonprofit could not give her the supervised hours that she desired and; 2. she refused to follow the medication procedures, which the nonprofit labeled insubordination. The employee responded by filing a complaint against the nonprofit with the professional licensing board, followed by a lawsuit in State Court. Although the claim relating to the employee’s lack of supervision had no merit, the suit brought several issues to light regarding the propriety of the nonprofit’s medication procedures, which ultimately supported the plaintiff’s claim of retaliation for whistleblowing. In the end, the nonprofit settled with the former employee for a significant amount of money, even though she had earned very little during her employment.

Lessons Learned

This claim likely could have been avoided if proper communication had been utilized at the outset of the hiring process. The expectations of the position should have been clearly communicated to the employee in a job description listing essential job functions with a written job offer establishing the terms of the employment.  If this had been done, the employee may not have accepted the job to begin with, or would have understood that professional supervision was not being offered so there would not have been the unmet expectation that motivated her filing suit. Written documentation would have supported the nonprofit’s hiring intent.

Additionally, the nonprofit should have investigated the concerns expressed by the employee to determine if proper medication procedures were being followed, rather than dismiss her objections as insubordination. Had it done so, the nonprofit would have been able to correct the internal errors and it would most likely have avoided liability. In essence, the lack of communication ended up costing tens of thousands of dollars, and hours of staff time, which far exceeds the staff costs associated with drafting clear on-boarding documentation and conducting an investigation into complaints related to operational compliance.

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