By Christopher DeGroff and Paul Kehoe

For the second time in less than six months, the EEOC finds itself on the wrong side of a lawsuit.  On November 4, 2013, the State of Texas sued the EEOC in the Northern District of Texas seeking declaratory and injunctive relief against the EEOC for issuing its 2012 arrest and conviction guidance (the “2012 Guidance”). In short, the Texas complaint argues that the EEOC did not have the authority to issue this  rule (described in detail below). The lawsuit also claims that the EEOC’s position that Title VII trumps conflicting state laws violates its state sovereignty. As it stands, Texas state law allows for blanket, no-felons policies at certain state agencies. Through this lawsuit, Texas, in its role as an employer, attempts to preemptively force the EEOC to defend its 2012 Guidance. Importantly, this lawsuit follows a pointed letter from nine Attorneys General stating that the 2012 Guidance is “misguided and a quintessential example of gross federal overreach” (here) and attempts in Congress to prohibit the EEOC from spending funds enforcing the 2012 Guidance. 

The Texas suit itself highlights several state agencies that absolutely bar anyone convicted of a felony, or certain felonies, from employment, including the Department of Public Safety,  the Department of Aging and Disability Services, the General Land Office, the Juvenile Justice Department, the Lottery Commission, the Parks and Wildlife Department and the public school system.  

Since 1987, during the chairmanship of Clarence Thomas, it has been the EEOC’s policy that an employer should avoid blanket, one-size fits all, criminal record policies.  The EEOC’s 1987 guidance incorporated the test set forth in Green v. Missouri Pacific Railroad Co., 523 F.2d 1290 (8th Cir. 1975) (the “Green factors”). The Green factors include the gravity and severity of the crime; the nature of the job at issue; and how long ago a crime was committed. The Green factors were, in the 1987 guidance, and remain under the 2012 Guidance, the touchstone in examining criminal record use policies. While the 2012 Guidance expanded on the Green factors to include an “individualized assessment” component, the EEOC, as it must, explicitly recognized that Title VII “does not require an individualized assessment in all circumstances.” 

To date, the Commission has lost three major cases in this area, but none of those courts actually reached the merits of the EEOC’s underlying theory. The EEOC lost in Peoplemark (here and here) because it pursued a violation based on a companywide policy that did not exist. The EEOC lost in Kaplan (here) because it failed to show a prima facie case of disparate impact and, at least in part, because the EEOC maintained a credit and criminal background check policy for its own employees. Finally, the EEOC lost in Freeman (here) because its expert analyzed data from the wrong period of time. The Commission is in active litigation alleging that employers’ criminal background policies had a disparate impact on minorities and as such, violated Title VII.

The Texas action is not without its quirks. For example, the Department of Justice is the governmental arm that litigates Title VII violations against state agencies and not the EEOC. The State of Texas’s lawsuit nevertheless highlights the Hobson’s choice for employers where state laws prohibit felons from obtaining certain positions. When Congress enacted Title VII in 1964, it specifically exempted individuals from federal liability for following state law, unless that state law “purports to require or permit the doing of any act which would be an unlawful employment practice under [Title VII].”  42 U.S.C. § 2000e-7. That Title VII standards preempt conflicting non-federal employment law requirements is viewed by many as a given. 

The 2012 Guidance, however, fails as a practical matter to clarify what the Commission would expect an employer to do when faced with a state law provision that potentially violated Title VII.  Likewise, the 2012 Guidance fails to specifically inform employers what they can do when considering felons for employment, but rather merely outlines what the Commission believes that employers cannot do. Enter: the Lone Star State and its current suit.

Regardless of recent setbacks, the Texas suit is likely to yet again galvanize the EEOC to rally around its embattled background check theories. The EEOC’s agenda is fairly characterized as “high risk – high reward,” where pushing the boundaries of EEO laws is an explicit EEOC national priority (here). Whether the EEOC is successful prosecuting these cases, or defending its policy in Texas, remains to be seen. The implications of these cases will likely clarify the bounds of how courts will view the EEOC’s interpretation of Title VII in this area. The Texas suit, however, has ensured that this area remains in the spotlight.

Readers can also find this post on our Workplace Class Action blog here.