LawFlash

EEOC Broadens and Clarifies Scope of Title VII Enforcement

April 27, 2012

Equal Employment Opportunity Commission extends Title VII protection to transgendered individuals, and provides updated guidance for employers on the consideration of arrest and conviction records in employment decisions.

This week, the U.S. Equal Employment Opportunity Commission (EEOC or the Commission) took two major actions that broaden the scope of its enforcement of Title VII of the Civil Rights Act of 1964 (Title VII), which prohibits employment discrimination based on race, color, religion, sex, and national origin, and signal the Commission's intent to continue its aggressive enforcement related to the use of criminal history. First, in a landmark ruling, the EEOC held that transgender workers are protected by Title VII, and, second, the EEOC issued updated guidance concerning employers' use of criminal arrest and conviction records when making hiring and other employment decisions. Both developments should be of significant concern to employers, as we expect that the EEOC will aggressively pursue both issues in charge investigations and enforcement matters.

EEOC Holds That Transgender Workers Are Protected by Title VII

In a precedent-setting opinion issued on April 23, the EEOC held that transgender workers are protected by Title VII. The decision came in the case of Mia Macey, a transgender woman who alleges that she was denied a job with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) after she disclosed that she was in the process of transitioning from male to female. The opinion is the first from the EEOC to address legal protections for transgender employees, and although its most immediate impact will be felt by federal employers that are directly regulated by the agency, it also has far-reaching implications for private companies. Because the EEOC is responsible for interpreting and enforcing Title VII on a nationwide basis, employers in every state—even those in jurisdictions without statutory protections for transgender employees—could now face federal claims of discrimination by employees who are not traditionally gendered.

The Decision
Mia Macey, a veteran police detective in Phoenix, Arizona, was born male. Macey had presented as a man throughout her career until 2010, when she decided to relocate. She discussed the move with her supervisor, who told her about an open position with the ATF in San Francisco. Macey applied for the job, and while still presenting as a man, spoke with the hiring manager, who purportedly assured her that the position would be hers so long as she passed the mandatory background check. The ATF began its standard investigation, and during this process, Macey informed the agency that she would be changing her name and gender. Just days later, Macey alleges, she was told that the position for which she had applied was being eliminated. In reality, her complaint alleges, the position was filled by another individual. Thereafter, Macey filed a complaint with the EEOC alleging discrimination on the bases of her "sex [and] gender identity (transgender woman), and on the basis of sex stereotyping."

In response to this complaint, the EEOC informed Macey that it would be dividing her claims into two categories—those that were covered by Title VII and those that were not. According to the agency, gender identity was not covered by Title VII and therefore Macey was entitled to less protection and fewer remedies. Macey objected, contending that discrimination on the basis of gender identity is a type of gender discrimination, and therefore actionable under Title VII. The EEOC rejected this contention, and Macey appealed to the Commission.

On appeal, a unanimous Commission sided with Macey, grounding its decision in the Supreme Court's seminal opinion in Price Waterhouse v. Hopkins, 490 U.S. 228 (1990). The Commission reasoned that Title VII prohibits not just sex discrimination (that is, discrimination on the basis of biological sex), but any discrimination on the basis of gender stereotyping. In other words, the law prohibits employers from taking adverse employment actions against an individual because he or she fails to conform to any gender-based expectations or norms. Discrimination against a male who is presenting as a female, the Commission concluded, is just one type of discrimination that falls under sex discrimination. Thus, the Commission explained, whether the ATF decided not to hire Macey because they wanted a male and not a female, or because she was a biological man presenting as a female, her claims are actionable under Title VII and cannot be separated for investigation and adjudication.

The Impact
By taking the position that Title VII protects transgender employees, the Commission has handed advocates for transgender rights a breakthrough victory. For more than a decade, advocates for the lesbian, gay, bisexual, and transgender community have been working to pass the Employment Non-Discrimination Act (ENDA), which would add sexual orientation to the categories protected by Title VII. One of the hot-button issues in the ongoing debate has been whether ENDA should include protections for transgender people. The Macey opinion largely obviates that debate.

In this new environment, transgender individuals will be able to file a charge with the EEOC and, if the Commission determines that the charge has merit, the agency could sue an employer under Title VII. The EEOC also may now issue a private right to sue to the charging party. It remains to be seen whether courts will agree with the EEOC's position.

What Can Employers Do to Protect Themselves?
Employers in jurisdictions where gender identity was not already protected prior to the Macey ruling should consider revising company policies and training programs to address this new risk.

EEOC Issues Updated Enforcement Guidance on Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII

On April 25, the EEOC issued updated enforcement guidance concerning employers' consideration of criminal arrest and conviction records when making hiring and other employment decisions. Approved by a 4-1 vote, the EEOC guidance states that, although Title VII does not bar the use of criminal background checks, employers may violate Title VII if (1) they intentionally discriminate, on the basis of race or national origin, against individuals with similar criminal histories or (2) their criminal background check policies have a disparate impact based on race or national origin, and they cannot demonstrate a "job-related business necessity" for those policies.

While the Commission maintains that the updated guidance does not reflect a change in its policies, but merely updates and consolidates existing EEOC policies and guidance on the subject, the new guidance demonstrates the Commission's new commitment to investigating and pursuing enforcement actions in criminal background check cases. The guidance also demonstrates the risks associated with the application of broad, across-the-board policies concerning the use of criminal background checks.

The Updated Guidance
The EEOC issued its updated guidance in response to the Third Circuit's 2007 decision in El v. Southeastern Pennsylvania Transportation Authority, 479 F.3d 232, which faulted the Commission's prior guidance—issued in 1987 and 1990—for "insufficient legal analysis." Specifically, the Third Circuit noted that the prior guidance failed to provide robust guidance regarding how employers could use criminal background information. In response to the El decision, the Commission held public meetings in November 2008 and July 2011, received more than 300 comments, and issued its updated guidance on April 25. The updated guidance addresses both disparate treatment and disparate impact discrimination based on criminal background checks.

The updated guidance reinforces that employers may not intentionally discriminate, on the basis of race or national origin, against individuals with similar criminal histories. For example, an employer violates Title VII if it treats the criminal records of African American or Hispanic job applicants differently than the criminal records of white applicants.

Of greater concern to employers, the updated guidance explicitly states that "criminal record exclusions"—that is, excluding applicants based on their criminal records—have a disparate impact on race and national origin. Therefore, the practical impact of the guidance is that employers, in defending their use of criminal history, may be limited to proving that their use of criminal background checks is "job related and consistent with business necessity" in order to avoid Title VII liability; the new guidance suggests that the EEOC will no longer consider the question of whether there is in fact a disparate impact.

Rather than establishing a bright-line rule, the updated guidelines state that the use of arrest and conviction records is "job related and consistent with business necessity" in two broad situations: (1) when the employer validates its policy using the EEOC's Uniform Guidelines on Employee Selection Procedures, and (2) when the employer develops a targeted screen that considers the nature of the crime, the time elapsed since the commission of the crime, and the nature of the job for which an individual is applying. From a practical standpoint, employers that wish to consider criminal histories will need to inform individual applicants that they are being excluded on the basis of their criminal record, provide those applicants with an opportunity to explain their criminal records, and consider the explanations provided when deciding whether the use of the applicants' arrest and conviction records is, in fact, job related and consistent with business necessity.

Finally, while an employer may not be sued under Title VII for following a federal law or regulation that requires employers to consider applicants' criminal records, an employer may still face Title VII liability when it exceeds the requirements of federal law regarding the consideration of applicants' criminal records. Similarly, compliance with state or local laws requiring criminal background checks is not a shield from Title VII liability.

The Impact
The newly issued guidance illustrates the EEOC's commitment to investigating and pursuing enforcement actions in cases concerning criminal background checks. Not only does the updated guidance highlight the large number of employers that rely upon criminal background checks—the guidance cites to a survey in which 92% of responding employers stated that they subject all or some of their job candidates to criminal background checks—the EEOC has already initiated a number of investigations concerning the subject. During the public meeting at which the guidance was approved, EEOC Commissioner Stuart J. Ishimaru noted that the EEOC has already undertaken more than 100 investigations related to arrest and conviction issues. Commissioner Ishimaru also highlighted a recent $3 million settlement arising out of a criminal background check case. With the issuance of the updated guidance, we expect that the EEOC will actively and aggressively pursue additional investigations and enforcement actions regarding the use of criminal background checks in employment decisions.
 
What Can Employers Do to Protect Themselves?
Employers should conduct a thorough review of both their written policies concerning the use of criminal background checks in hiring and other employment decisions, as well as the practices used to implement those policies. As a part of that review, employers should consider the alternatives presented under the updated EEOC guidelines to demonstrate that their use of criminal background checks is consistent with Title VII. Those alternatives include taking steps to validate policies using the Uniform Guidelines on Employee Selection Procedures, and/or ensuring that the company's policies and procedures regarding the use of criminal histories provide for a targeted screen that considers (1) the nature of the crime, (2) the time elapsed since the commission of the crime, and (3) the nature of the particular job for which an individual is applying.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis attorneys:

Boston
 
Chicago
 
Dallas
 
Houston
 
Los Angeles
 
Miami
 
New York
 
Palo Alto
 
Philadelphia
 
Princeton
 
San Francisco
 
Washington, D.C.