Employee Background Check Lawsuit Settled for $2 Million

employee background checkBaldor Electric Co. has agreed to settle a U.S. Department of Labor Office of Federal Contract Compliance Programs discrimination claim based on their employee background check policy for $2 million.   Baldor holds more than $18 million in federal contracts and is owned by ABB Ltd. In Zurich, Switzerland. The Labor Department investigation determined that Baldor’s background screening process had a disparate impact on women and minorities.  The result was 795 qualified women and minorities did not have an opportunity to advance to the interview stage of the hiring process.

Does this sound familiar?

It should if you have been following the EEOC over the past 12 months.  The new EEOC Guidelines issued this spring has placed criminal record checks in the center of their radar.

Now the DOL has taken the same position as the EEOC believing that the proliferation of criminal background checks is adversely affecting ex-offenders.  This is a tough new environment for employers who are trying to balance claims of negligent hiring and retention and workplace violence while at the same time having background screening policies that do not have a disparate impact on minorities.

The DOL investigation claimed that those candidates that were affected did not receive an interview because of their criminal history.  This is important to note.

Why?  Because the EEOC has made it clear that candidates with a criminal record should have an opportunity to explain the circumstances of their conviction.  This lines up with “Ban-the-Box” legislation that has been sprung up across the U.S. whereby employers in certain jurisdictions are banned from asking about criminal histories on the application.

So what are the employee background check lessons for us?

  1. Criminal background check policies should not be zero tolerance policies;
  2. Screening policies should consider:
    1. What is the nature of the criminal record?
    2. How long ago was the crime committed?
    3. How does the criminal record impact the position?
    4. Candidates should be given an opportunity to explain their criminal history.

There is a lot of activity across the U.S. impacting employee background checks so do not hesitate to contact us if you have questions.