Excerpted from a Lexology post by Manatt Phelps & Phillips LLP

Why it matters
The Equal Employment Opportunity Commission’s (EEOC) guidance on the use of background checks will remain on hold in Texas after a federal court judge granted partial summary judgment in favor of the state, holding that the agency violated the Administrative Procedure Act (APA).

In 2012, the EEOC released guidance warning employers that the blanket use of criminal background checks to block the hiring of those with criminal records could have a disparate impact on minorities, in violation of Title VII. Instead, employers should use background checks on a case-by-case basis, the agency advised.

The state of Texas sued, arguing that the EEOC overreached. Considering cross-motions for summary judgment, a federal court agreed that the guidance was a substantive rule that was issued without notice and the opportunity to comment, in violation of the APA, and issued an injunction against enforcement in the state. However, the court also declined to declare that Texas has a right to maintain and enforce its laws and policies that bar convicted felons from serving in any job it deems appropriate. Nor did the court enjoin the EEOC from issuing right-to-sue letters in relation to the denial of employment opportunities based on the criminal history of the job applicant.

Detailed discussion
In 2012, the Equal Employment Opportunity Commission (EEOC) released “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.” The guidance emphasized that while the use of criminal justice history information does not violate Title VII per se, an employer may run afoul of the law if the checks result in systemic discrimination based on race, color, national origin, religion or sex.

You can read the full post here.