Supreme Court Muddies Up the Religious Waters

Every now and then the U.S. Supreme Court issues an opinion that is absolutely idiotic. It doesn't happen often; even when I disagree with the Court's holdings, I usually understand the reasoning and the ramifications of the case. This is especially true in employment law decisions. But the Court's latest pronouncement on Title VII religious accommodation in EEOC v. Abercrombie & Fitch Stores, Inc. makes me want to pick the phone up, call Justice Scalia's chambers, and ask him if he had been testing out D.C.'s new recreational marijuana law before he sat down to write the opinion.

The facts are a little confusing, but probably reflect a situation that is more common than we'd like to think. A young woman who was a practicing Muslim came to interview for a sales job at Abercrombie wearing a headscarf, something that was part of her religious practice. The store assistant manager rated the young woman as qualified but was concerned that the scarf would be inconsistent with Abercrombie's "Look Policy", which focused on the appearance of its sales staff as a way of reinforcing the company brand. The assistant manager talked to the store manager and informed him that she believed (but was not certain because she did not ask) that the headscarf was related to the young woman's faith. The store manager responded that the scarf was inconsistent with the Look Policy, as was all other headgear, religious or otherwise, and vetoed the hiring.

The EEOC took the case up, won liability on summary judgment (highly unusual), and then at a trial on damages won $20,000. On appeal the Tenth Circuit  reversed the district court, concluding that an employer cannot be liable under Title VII for failing to accommodate a religious practice, unless the applicant/employee tells the employer that an accommodation is needed.

The Supreme Court, with Justice Scalia writing for seven other justices, reversed the Tenth Circuit, noting that Title VII contains no requirement for employer knowledge of a religious accommodation before liability attaches.  Drawing a hard and fast line between Title VII's intentional prohibition against certain employer motives, versus the employer's knowledge of religious entanglement, Justice Scalia held that an employer cannot make an applicant's religious practice, known to the employer or otherwise, a factor in employment decisions. He then went on to say that Title VII does not demand neutrality with regard to religious practices, but rather that Title VII gives religious practices favored treatment, requiring employers to avoid infringing on religious practices whether they are known to be so or not.

I thought this was a crazy thing to say when I first read the opinion, and subsequent rereading of it has not changed my mind. In at least a hat tip to common sense, Justice Alito writes a very nice concurrence that requires the employer to have a suspicion that the practice motivating its decision is religious in nature before liability will attach.

Here's the problem with the Court's opinion-while mainstream religions such as Judaism (a yarmulke), Christianity (a crucifix), and Islam (a hijab, headscarf, or beard) manifest themselves in certain well-known ways, the EEOC takes the position that all kinds of strongly held beliefs are religions, even ones that do not outwardly proclaim themselves with recognized symbols or displays. It is quite possible to imagine a scenario where someone who is a Druid and works for a building contractor is given an order to bulldoze trees from a construction site. Because he is an animist, the employee refuses. His refusal is not outwardly religious, and unless he has the presence of mind to volunteer his religious objection, it will not be obvious to the foreman, who is likely to simply fire the employee for refusing to carry out his instructions. Under these circumstances, an act of religious discrimination has occurred, according to Justice Scalia and his seven brothers and sisters.

Or even worse-someone who is a vegan attends his company's barbecue on the Fourth of July. The boss is cooking up hamburgers, and as the employee comes through the food line, the boss proceeds to scoop a burger, dripping with grease and animal protein, onto this person's plate. The employee takes the plate and promptly throws it into the trash because it's contaminated; the boss takes this action personally and terminates the employee the next day. Under the Scalia test, this is also religious discrimination.

Anyone who practices in this area could see this problem coming a mile away. I'm guessing none of the Justices' clerks practice in this area.  I'm hoping that this is one of those decisions that gets modified quickly by the Court.  Otherwise, the implications are highly problematic for almost any employer.

EEOC Gets Rebuked By Federal Court on Criminal Background Check Allegations

As I have noted previously, the EEOC is all hot and bothered about employers using criminal background checks to screen potential new hires. The cynical side of me says this is simply a political ploy to generate votes out of the traditional Democratic population, but it has significant ramifications for employers.

At least one federal judge has noted the “Catch 22” that the EEOC’s position creates for employers, namely that the EEOC is suing employers for conduct that prevents other people from suing these same employers and the employer is heavily penalized either way.

The most recent case comes out of the federal court in Maryland, and involves a “pattern or practice” case brought by the EEOC against a company that provides services for expositions, conventions, corporate events, meetings and exhibit programs. The very nature of the business means that some employees often handle significant amounts of money, as well as come in frequent contact with customers and their guests.  Under these circumstances, and given the fact the company operates across the United States, it would be inconceivable for its management not to require background checks, including criminal and credit background checks, for its employees. That is exactly what the company did, although it was quite specific and careful in the way that it did so. For example, general employees who did not hold credit sensitive jobs were subject only to a criminal history investigation and social security verification. Employees in credit sensitive positions also passed a credit history review. For company officers, general managers and department heads, the employer performed an education and certification verification. Overall, the company ran credit checks for 44 job titles out of 153 positions that it identified in its policies.

Nor was there a blanket hiring exclusion for criminal convictions – the company offered the opportunity for an applicant to explain a criminal conviction, did not consider any criminal convictions that occurred more than seven years before the application date, and used a multi-step procedure to deal with convictions, arrest warrants, and other criminal record issues. Any initial decision by an office manager not to hire an applicant because of a conviction record was reviewed and approved by the senior vice president for human resources before becoming final.

With respect to credit checks, the company used 12 separate standards for exclusion of an applicant from a credit sensitive position, ranging from accounts of $300 or more that were more than 90 days past due to unsatisfied liens and delinquency in paying child support.

In fact, the company did not use a blanket hiring exclusion based on any single criterion, with the notable exception of a false statement on the application.

Nevertheless, the EEOC filed suit against the employer, claiming a pattern or practice of discrimination against African American job applicants by using credit history as a hiring criterion, and against African American, Hispanic and male job applicants by using criminal history as a criterion. As is typical in these cases, the Commission alleged that the company’s use of these criteria had a disparate impact on protected classes of employees.

Unfortunately for the Commission, in trying to prove its case that the company was discriminating in use of these background checks, it used expert testimony that was highly suspect, and ultimately thrown out by the trial court. The court's review of the Commission's sloppy analysis, which was based on equally bad data (the court demonstrated that the EEOC’s expert had cherry-picked information provided by the company to make the determination decisions look as bad as possible) is noteworthy, but the real focus of my concern is the burden of proof that the Commission had to sustain in these kinds of cases. Specifically, a plaintiff in a disparate impact claim has to not only show a general statistical disparity, but must point to a particular employment practice as the cause  of the statistical difference in hiring. Where a hiring process has multiple elements, as in this case, a plaintiff has to identify the elements that it is challenging and demonstrate that each particular challenged employment practice causes a disparate impact. This is a significant burden indeed, and one that the Commission absolutely failed to establish in the case.

A key lesson for employers – do not make your review of background check criteria a one-step process. The court determined that by using different types of criteria depending on a specific job, and simultaneous consideration of both subjective and objective criteria for hiring, an employer created a long list of factors, each one of which had to be assessed and evaluated by the plaintiff to cull out the problematic element. This creates several evidentiary problems for any plaintiff, among them the need to conduct an extremely thorough and competent regression analysis that analyzes each key hiring qualification, while at the same time zeroing out the influence of the other factors. Moreover, the analysis has to be performed on a population that is comparable to the population that applies for these positions, or is at least qualified for these positions.

So the lesson for the employers is fairly straight forward – do not put in place a broad spectrum disqualification criterion based on whether an individual has a bad credit record or conviction history. Rather, the employer should match various types of credit issues, and conviction records, to specific jobs and develop a rational explanation for how it weights each factor. Doing so will go a long way in convincing a trial court that the employer is trying to live within the limits of the Title VII and the antidiscrimination statutes. Doing so also presents a potential plaintiff with a significant evidentiary burden.

Faced with an employer that carefully assesses credit and conviction records, courts will usually hold plaintiffs to a high standard on these disparate impact cases. As the trial court in this case put it, anything less, " would be to condemn the use of common sense, and this is simply not what the discrimination laws of this country require.”

I'm Thinking the Law Firm in This Article Can Expect a Visit from the EEOC Pretty Soon

...because its requirement that everyone who works there have a college degree is going to have a disparate impact of some type on protected groups.  I referenced this in an earlier post about the EEOC's attacks on requiring high school diplomas for employment and the disparate impact that has on people with disabilities. I assume the exact same logic applies to the even more onerous requirement of a college degree.

If this employer can't provide a definitive link between a college degree and the job requirements for answering a telephone or filing, then I think the firm's going to have some explaining to do.  Stay tuned.

New EEOC Guidance on the Use of Conviction Records

The EEOC yesterday published its long-awaited Enforcement Guidance on employers' Consideration of Arrest and Conviction Records in making employment decisions. You can access the lengthy document here.

My initial review of the document indicates that, while it is not as bad as many of us feared (the EEOC tends to extend its reach well beyond the scope of logic, in most cases), it continues the Department of Labor's disturbing trend of limiting employer discretion with respect to the implementation of general policies and rules across a workplace. In other words, the Commission continues to review and evaluate employer decisions as if they were all Americans with Disabilities Act situations-it's becoming increasingly difficult for an employer to have a consistent policy that applies across the board without running afoul of the EEOC's biases.

The Enforcement Guidance divides its analysis into two parts-one for disparate impact cases and one for disparate treatment cases. The disparate treatment analysis is fairly straightforward and commonsensical-you can't treat people with similar conviction records differently based on membership in a protected class.

The disparate impact analysis is another matter. The EEOC significantly overreaches here, and any employer using conviction records on its applications or as a screening device needs to be aware of the significant burden that the EEOC is imposing on the employment decision-making process.

As an initial matter, it is not hard to demonstrate that use of criminal conviction data has a disparate impact on protected populations. The Guidance itself notes that black and Hispanic populations are subject to arrest in numbers significantly disproportionate to their representation in the general population. These dissimilar numbers carry on through the rest of the criminal justice system, with disproportionate conviction and incarceration rates as well.

Once disparate impact is established, it is the employer that has the burden of production of persuasion to demonstrate that the challenged practice-use of conviction data-is job-related for the position in question, and consistent with business necessity. Arrest records are of particular concern, the Guidance clearly states that employment decisions based solely on arrest records are never job-related or consistent with business necessity. This is not surprising; the Commission has taken this position for many years because of the fact that arrests frequently do not result in convictions, and are not necessarily indicative of anything other than being at the wrong place at the wrong time. The Commission notes that an employer may inquire into the conduct underlying the arrest and determine that the conduct renders the applicant unfit for employment, and that such a decision would not be discriminatory.

Most employers have hiring policies inquiring about convictions, and typically will exclude employees for consideration if they have a felony conviction. As noted above, the Commission Guidance directly opposes any type of systematic screening based on such a straightforward test. Instead, the Guidance requires that an employer using conviction data (which the Commission refers to as a "criminal conduct exclusion") must establish a systematic, individualized inquiry for each employee affected, in order to avoid disparate impact claims. This inquiry can take one of two forms-the employer can validate that the job for which it is conducting the screening is directly affected by the criminal conduct at issue, as described in the Uniform Guidelines on Employee Selection Procedures (the intricate and highly complex statistical study for such a validation is described at 29 CFR Sec.1607.5); or the employer can develop a "targeted screen" considering the nature of the crime, the time elapsed, the nature of the job, and then providing the employee an opportunity to demonstrate that there were special circumstances in her case that show that she should not be excluded.

Either of these procedures imposes a huge burden on employers. The description of the individualized assessment required by the targeted screening process alone lists nine separate factors an employer should consider for each employee before a valid conviction record determination can be made. Of particular concern is the Commission's requirement that the employer demonstrate a job performance correlation between the specific criminal conviction and the specific position at issue; the Guidance lists several scenarios demonstrating that an employer that uses conviction data as a general screening device will simply not prevail in an EEOC inquiry.

The Guidance closes by delineating the EEOC's version of "best practices", which not surprisingly start with a recommendation that employers eliminate policies or practices excluding people from employment based on any criminal record. These "best practices" go on to describe extremely narrow and highly detailed policies and procedures that effectively preclude any type of generalized conviction policy. Given that this is an Enforcement Guidance, every human resources director involved in hiring policies should carefully review the requirements here and begin to incorporate them into company employment processes.

Diplomas and Job Selection Standards

One of the things that has always puzzled me is why the various federal discrimination agencies (not to mention plaintiffs' attorneys) have not attacked employers on the high school/college diploma requirement for hiring or promotion. It isn't like there hasn't been some hint that this might be a lucrative area for a disparate impact type claim-the Griggs case from the early 1970s was a clear warning by the Supreme Court that generic education standards for employment might not hold up under any kind of systematic analysis.

Just think for a moment about the difficulty of justifying the need for a bachelor's degree with respect to many jobs. Especially in the liberal arts area. What exactly does a bachelor of arts degree mean with respect to a job such as marketing, insurance underwriting, medical technology, food service or financial management? In truth, aren't many of the skills people need for these positions learned on the job, as they move up through the ranks of blue and white collar America?

There may be some change on the horizon here. The EEOC recently issued what it refers to as an "informal discussion letter" in response to a query about the application of the ADA in situations where learning disabled students have difficulties on state required tests, that result in their being denied a high school diploma. Expanding on the question before it, the Commission opined that a qualification standard, test or other selection criteria such as a high school diploma requirement that effectively screen out an individual or class of individuals with a disability must be "job-related for the position in question and consistent with business necessity."

Those are ominous words inside the quotation marks, ladies and gentlemen. Because if you can't articulate why, exactly, a person needs a high school diploma to perform a specific job, or if your workforce contains examples of people without high school diplomas performing the work in question, or if it's possible to train people up to the necessary level of performance without them having a high school diploma, then you may be in trouble under the ADA with respect to people with learning disabilities. Moreover, it's a simple step from challenging high school diploma requirements to challenging college graduation requirements along the same lines. And there's no disputing the fact that a college graduation requirement has a significant disparate impact among certain populations, including minorities, and the disabled.

And now to make this issue really convoluted, a recent law review article from William and Mary Law school cites studies that convincingly demonstrate that the best predictors for job performance across the board are so-called "g" loaded standards that are heavily indicative of cognitive ability. Graduation from high school and from college are classic g loaded standards, and an employer applying these types of tests will, according to the research, end up with a significantly less diverse and more effective workforce.

Whether this type of broad-spectrum social science analysis would have any effect on a judge or jury in an actual disparate impact case, where the assumptions are that an impartial job selection process will result in workers from each protected class being hired or promoted in rough proportion to their numbers in the population (which the article categorically states is an incorrect assumption) remains to be seen. What is clear is that most employers would be hard-pressed to point to specific elements of any job in the workplace that are grounded in a high school or college diploma, even though these cognitive standards work well.

For now the floodgates for this particular type of litigation are still secure. But for how long?