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Unpacking California’s Proposed Ban on Background Screening

On Behalf of | Sep 27, 2023 | Fair Credit Reporting Act

California Senate Bill 809 would repeal California’s Fair Chance Act of 2017 and replace it with a new Fair Chance Act. This Act would make it an unlawful employment practice for a California employer to – among other things – consider or even inquire about an applicant’s criminal conviction history. To remove any doubt about the breadth of this prohibition, the proposed Act also forbids taking any adverse action based upon the candidate’s conviction history. To be clear, I am giving you the short version; the Act enumerates nine extensively detailed prohibitions on this subject.

The proposed Act does provide for three exceptions: a criminal background check report can be obtained if Federal or state law ~

  • Requires the employer to obtain information about a particular conviction;
  • Prohibits an applicant from holding the position if she has a particular conviction; or
  • Prohibits the employer from hiring an applicant with a particular conviction.

Strangely though, the Act still seeks to inhibit taking adverse action even if a legally disqualifying conviction is discovered. California employers must conduct an individualized assessment and justify in writing why they are denying employment based upon the conviction. (One would think the existence of a federal law saying an employer shouldn’t employ a convict would be sufficient, but apparently not.) The Act goes so far as to say that, if the candidate is currently not incarcerated and has completed his sentence, there is a “rebuttable presumption” that there is no direct and adverse relationship between the conviction and the position at issue. The logic of this Act would seem to compel an employer to violate other federal or state laws unless it can satisfy the individualized assessment standard.

The California Chamber of Commerce has come out against this bill, describing it as a “job killer,” observing this bill would undo the carefully negotiated 2017 Fair Chance Act, which struck an appropriate balance between the interests of employers, the general public, and formerly convicted individuals seeking to reenter the work force. The Chamber’s coalition letter to the Senate Judiciary Committee is worth the read.

If enacted, to what extent will this bill impact background screening? Here are my thoughts:

  • Scenario One: a Virginia employer is seeking to hire a Georgia resident who used to live in California. On its face, this law should not apply to the Virginia employer and would not prevent the employer from obtaining a background check report that contains criminal conviction information from a California county. This doesn’t mean the Georgia resident wouldn’t sue the Virginia employer arguing California law protects him, but this should be a difficult position for the plaintiff to win.
  • Scenario Two: A California employer seeks to hire a California resident. The law would apply. The employer should not seek to obtain a background check report from a background screening company containing criminal history information.
  • Scenario Three: a California employer seeks to employ a resident of Georgia. The law most likely applies, and a criminal history background check should not be performed.
  • Scenario Four: a Virginia employer is seeking to hire a California resident. This one is ambiguous. The Virginia employer would likely argue that California law doesn’t apply. The candidate would argue the opposite, and being a resident of California, would likely file suit in that state against the Virginia employer. A cautious Virginia employer will likely not run a criminal history background check on this California citizen.

An employer will also want to be careful about other components of the background check that one would not initially think are criminal in nature. For example, motor vehicle reports contain conviction history. Sometimes, a past employment verification will result in the disclosure of criminal history information – when an aggrieved prior employer accuses the candidate of criminal behavior. Sanctions searches can certainly reveal criminal history information. If this bill passes into law, California employers will probably expect background screening companies to do a thorough scrub of all the component parts of their reports to ensure all criminal history information is stripped from them.

Assuming background screening companies are willing to continue to provide California conviction information to employers and candidates located in other states, they will want to capture the employer’s state of residence and the candidate’s states of residence and work, providing that information to their public record researchers and quality assurance personnel so that they can know whether the California law applies to the particular report being prepared. This is particularly important, since bill defines “employer” to include those who “evaluate” the applicant’s conviction history on behalf of the employer. The term “evaluate” is left undefined.

If this bill is enacted, do not be surprised if its constitutionality is challenged in a federal lawsuit. The Ninth Circuit’s recent opinion in Yim v City of Seattle seems pretty clear – prohibiting an employer from inquiring about criminal history information violates the First Amendment. And we anticipate some jurists will also conclude that the bar on its use will violate the substantive due process clause.

~ Todd

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