United States: Philadelphia Expands "Ban The Box" Ordinance To Further Restrict The Consideration Of Criminal Background Records In Hiring Decisions

On December 15, 2015, Philadelphia Mayor Michael Nutter signed amendments to the city’s 2011 Fair Criminal Screening Standards (“Ban the Box”) Ordinance that limits employers’ ability to inquire about the criminal backgrounds of job applicants. These amendments expand the substantive and procedural restrictions on employers’ consideration of criminal conviction records. The amendments take effect on March 14, 2016.

The amendments to the Ban the Box Ordinance (“the Ordinance”) make several key changes that significantly restrict the ability of employers to consider an applicant’s criminal record in the hiring process.

Expanded Scope of Covered Employers. The amendments expand the scope of the Ordinance to apply to all private employers with one or more employees, whereas the original Ordinance applied only to employers with 10 or more employees. The Ordinance does not apply in the limited circumstances where criminal background inquiries are authorized or mandated by another law or regulation. For example, criminal background checks are required for certain healthcare workers.

Deferral of Timing of Criminal Background Checks. Employers may conduct criminal background checks only after they have made a conditional offer of employment to an applicant. The original Ordinance permitted employers to conduct these checks after the first interview. The amended Ordinance prohibits employers from including in their job applications any question about criminal convictions, or even about applicants’ willingness to submit to a background check, “whether or not certain applicants are told they need not answer the question.”

However, an employer may give notice to applicants of its intent to conduct a criminal background check only after a conditional offer is made, as long as the notice is “concise, accurate, made in good faith” and states that “any consideration of the background check will be tailored to the requirements of the job.” As with the original Ordinance, if an applicant voluntarily discloses his or her criminal conviction record before a conditional offer is made, the employer is then permitted to discuss that record with the applicant.

Restricted Look-Back Period for Criminal Convictions. The amended Ordinance restricts employers from considering convictions more than seven years prior to the date of the inquiry, excluding any periods of incarceration. The original Ordinance did not impose any time limitation on conviction records that may be considered.

New Guidelines for Evaluating a Criminal Conviction; No Automatic Exclusions. Before an employer may disqualify an applicant based on his or her criminal conviction record, the employer has to make an individualized assessment of the relationship between the conviction and the particular position. The amended Ordinance prohibits employers from maintaining any policy of automatically excluding applicants with criminal conviction records from a job or class of jobs.

Employers should consider the following factors in this individualized assessment:

1. The nature of the offense;
2. The time that has passed since the offense;
3. The applicant’s employment history before and after the offense and any period of incarceration;
4. The particular duties of the job;
5. Any character or employment references provided by the applicant; and
6. Any evidence of the applicant’s rehabilitation since the conviction.

An employer may not withdraw a conditional offer of employment based on a criminal conviction record unless the conviction “bears such relationship to the employment sought that the employer may reasonably conclude that the applicant would present an unacceptable risk to the operation of the business or to co-workers or customers, and that exclusion of the applicant is compelled by business necessity.”

New Notification Requirement to Applicant. If an employer rejects an applicant in whole or in part based on the criminal conviction record, the employer is required to notify the applicant in writing and provide the applicant with a copy of the criminal history report. The employer then must allow the applicant 10 business days to provide evidence of an inaccuracy on the report or to provide an explanation. This requirement is similar to the requirements for conducting criminal background and credit checks under the federal Fair Credit Reporting Act.

New Posting Requirement. The expanded Ordinance requires employers to post a notice of the Ordinance in a form to be issued by the Philadelphia Commission on Human Relations (“the Commission”).

New Complaint Procedure and Private Right of Action. The amended Ordinance provides applicants with the right to file a complaint with the Commission within 300 calendar days of the alleged violation of the Ordinance. The Commission may then investigate the complaint and impose remedies on the employer including, but not limited to, a cease and desist order, injunctive or other equitable relief, payment of compensatory damages, payment of punitive damages up to $2,000 per violation, and reasonable attorneys’ fees. The amended Ordinance also gives applicants a private right of action to file a complaint in court after they have exhausted the administrative process with the Commission. Courts may grant relief to aggrieved applicants including, but not limited to, compensatory damages, punitive damages and reasonable attorneys’ fees.

What This Means for Employers

Philadelphia is among a growing number of major cities across the country, including San Francisco, Chicago and, most recently, New York City and Portland, Oregon, with “Ban the Box” ordinances. A number of states, including Massachusetts, Illinois, New Jersey and, most recently, Oregon, also have passed some form of “Ban the Box” law.

Further, the U.S. Equal Employment Opportunity Commission (“EEOC”) and other government agencies are supportive of efforts to require case-by-case evaluation of an applicant’s criminal conviction history as a means of combatting unlawful discrimination. For example, in its 2012 Enforcement Guidance on the consideration of criminal records in employment decisions, the EEOC stated that the disqualification of applicants based on criminal records may have a disparate impact on certain racial and ethnic groups.

The EEOC Enforcement Guidance recommends that employers conduct individualized assessments using, as a starting point, the Green factors, which are: (1) the nature and gravity of the offense or conduct; (2) the time that has passed since the offense, conduct and/or completion of the sentence; and (3) the nature of the job. As noted above, the amended Philadelphia Ordinance requires employers to consider in their individualized assessments multiple factors, which go beyond the Green factors.

The amended Philadelphia Ordinance appears to be more restrictive than the EEOC’s Enforcement Guidance in at least one key respect. The EEOC Enforcement Guidance permits employers to maintain, in limited circumstances, a policy or practice of “targeted exclusions” of individuals from particular positions for specified criminal conduct within a defined time period, as guided by the Green factors, without the need for an individualized inquiry. By contrast, the Philadelphia Ordinance prohibits employers from maintaining a policy of automatically excluding any applicant with a criminal conviction from a particular job or class of jobs and requires individualized assessments before rejecting applicants based on criminal convictions, unless an automatic exclusion is required by another law.

In light of Philadelphia’s expanded Ordinance, Philadelphia employers should review their hiring procedures to ensure compliance with the Ordinance and other laws governing the consideration of background checks including, but not limited to, the Fair Credit Reporting Act.

For example, employers in Philadelphia should consider removing from their applications for employment any reference to criminal convictions or willingness to conduct background checks, unless the reference meets the specific requirements of the amended Ordinance. If another law or regulation requires employers to ask certain applicants about criminal convictions, a separate application with an appropriate question consistent with those other legal requirements should be developed only for such applicants.

Additionally, Philadelphia employers who inquire about criminal convictions may want to develop or revise their criminal conviction inquiry forms to provide to applicants only after a conditional offer has been made. To the extent that employers reject an applicant based on a criminal conviction record, employers should be prepared to articulate the specific reason, tailored to the particular requirements of the job and the conviction at issue, among other things, why the conviction record disqualifies the applicant.

In consideration of the nuanced assessment of criminal background records required by the amended Ordinance, employers also may want to provide additional training to interviewers and other employees involved in the hiring process.

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