Academic journal article Journal of Business and Behavior Sciences

Protected Classes, Credit Histories and Criminal Background Checks: A New Twist to Old-Fashioned Disparate Impact Cases?

Academic journal article Journal of Business and Behavior Sciences

Protected Classes, Credit Histories and Criminal Background Checks: A New Twist to Old-Fashioned Disparate Impact Cases?

Article excerpt

INTRODUCTION

Credit reports are generally viewed as precursors to determine one's creditworthiness. Borrowers are accustomed to lenders mandating the disclosure of credit history as a condition to determining whether or not credit should be extended. Credit assessments are increasingly used to assist employers making hiring and promotion decisions. Few would doubt that in industries such as banking, finance and law enforcement, credit and criminal background checks may be necessary to ensure the integrity of those who are hired. The nexus between routine credit history and criminal background checks should be determined based upon a standard of job relatedness. However, employers who conduct routine credit history and criminal background checks and are unable to determine a connection between such checks and the type of employment may encounter legal challenges. One such challenge is that the use of credit and criminal background checks in making hiring and promotion decisions may have a discriminatory impact on the basis of protected class status. It is axiomatic that Title VII of the 1964 Civil Rights Act prohibits hiring and promotion practices which have a disparate impact on the basis of race, color, religion, national origin or sex unless the employer shows the practice is job related and consistent with business necessity. This article will examine employers' use of credit reports and criminal background checks in making hiring and promotion decisions. This article will also examine the use of statistics and statistical analysis by plaintiffs in establishing a prima facie case and by defendants in attacking the validity of such data.

TITLE VII of the 1964 Civil Rights Act

Title VII of the 1964 Civil Rights Act provides in pertinent part that

It shall be an unlawful employment practice for an employer to:

(1)fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privilege of employment, because of such individual's race, color, religion, sex, or national origin; or

(2)to limit, segregate, or classify his employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin (Title VII Civil Rights Act of 1964).

Since the passage of the 1964 Civil Rights Act, racial discrimination in the employment arena has undergone a metamorphosis from blatant, to the smoking gun, to the sublime and subdued. The forms of blatant and overt discrimination were pervasive during the pre-Title VII period, and its likely roots are traceable to the appalling era of the Black Codes. After the passage of the Thirteenth Amendment which abolished slavery, "nothing in the Constitution prevented a state from enacting laws - Black Codes, as they came to be known - that were blatantly discriminatory . . ." (Goldstein, 2011).

The smoking gun is a form of direct evidence which generally does not involve a written policy of discrimination. Indicia of discriminatory intent is demonstrated by an employer' s tolerating or encouraging an environment that condones discriminatory conduct and activity that thwarts job opportunities for members of protected classes or discourages them from seeking employment opportunities. In such circumstances, it is not likely that the punitive employer will admit involvement in promoting discriminatory activity by its workers. The "smoking gun" usually involves racially or sexually insensitive remarks, jokes or slurs.

The sublime and subtle form of discrimination is exemplified in cases involving "neutral" selection criteria which have a discriminatory impact on protected class members. Discrimination, in the general sense, is the denial of an employment opportunity based upon an individual's protected class status or characteristics. …

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