End the Madness at the EEOC

With no authority to do so and with flawed factual support, the EEOC has issued an enforcement guideline that would compel employers to discriminate in favor of minority ex-cons. It's past time for Congress to rein in the EEOC and make them withdraw this directive by other name.

(a) The EEOC Enforcement Guidance Procedure

Over 89 million Americans are presently out of the labor force. The New York Times seems to offer a muddled explanation for the fact that employers have money to hire but aren't doing so even when they need extra help.

The Federal Reserve's vision is less cloudy. In its latest beige book the Fed indicates that uncertainty about the
impact and requirements of Obamacare is playing a significant role in the national job freeze cutting into sales and hiring.

Of course, it's a major factor, but it is just one large example of the many regulations and actions by federal agencies -- entities with a great deal of power which bear no responsibility for their bad decisions -- that hamper the market and impoverish the nation.


Nothing so illustrates the foolish nature of these restrictions than the EEOC 's effort to compel employers to forego criminal background checks because ex-cons are more likely to be minorities -- a matter ably documented by a very critical Professor Richard A. Epstein.

To understand the genesis of this overreaching, a brief review is in order. As life became more complex, Congress passed laws allowing some details in legislation to be set by administrative agencies. In 1946, believing the agencies were exceeding their authority, Republicans in Congress passed the Administrative Procedure Act (APA) of 1946 which set some limits on the delegation of authority, particularly it set in place a notice and comment procedure which would allow interested parties to weigh in on issues before regulations were written.

Even so, not every agency was even granted regulatory power. Congress denied the EEOC the power to issue regulations at all. So, the agency adopted this rule requiring the hiring of minority ex-cons (with limitations discussed below) with no public impact, using a dodge called "enforcement guidelines".

While such "enforcement guidances" lack the force of law, employers ignore them at the risk of protracted and expensive litigation. Indeed, employers' counsel warns them of this:

While the Enforcement Guidance does not have the force of law, it is nonetheless a clear indication of how the EEOC will view employer requests for arrest and conviction information in assessing charges of discrimination. Taking time to review your policies with this guidance in mind may allow you to avoid future confrontations with the EEOC.

Congress can reassert its authority and make regulations more sensible by forbidding the use of enforcement guidelines as an end run around the APA and if anything indicates why this is essential, this case does.

(b) What does this Enforcement Guidance Provide?

Epstein summarizes the guideline as follows:

With the Enforcement Guidance, all private employers and all state employers must use detailed and particularized inquiries before turning down a minority applicant who has a criminal arrest or conviction on his record, even though employers can turn down a white applicant with the same past record without going through such hoops.

(The extensive and difficult to traverse hoops the EEOC has set up makes it likely that unless withdrawn, the guideline will encourage employers to forego criminal checks.)

Hans A. von Spakovsky, a former counsel to the Assistant Attorney for Civil Rights at the U.S. Department of Justice who is also highly critical of this guidance, notes it has some exceptions, exceptions which show that the EEOC recognizes -- when it chooses to -- the dangers of hiring ex-cons and the great risk or recidivism they pose:

The EEOC ignores this generalized risk at the very same time that it recognizes that its restrictions cannot be applied to certain industries -- because of that very risk. For example, the Guidance notes that federal law excludes certain felons from working as security screeners or otherwise having unescorted access to the secure areas of any airport and that there are equivalent requirements for federal law enforcement officers, child care workers in federal agencies or facilities, bank employees, and port workers. In other words, blanket exclusions based on the risk of repeated criminal behavior -- exclusions that cause disparate impact -- are legitimate when imposed by the federal government. However, these same exclusions are somehow suspect and discriminatory when imposed by private industry.

The EEOC also dismisses the well-established evidence regarding the recidivism of felons. To be certain, the propensity of an individual with a criminal record to commit a future crime may decrease as the length of time that he is crime-free increases, but such an individual cannot:

[B]e judged to be less or equally likely to commit a future violent act than comparable individuals who have no prior violent history. It is possible that those differences might be small, but making such predictions... is extremely difficult, and the criminological discipline provides no good basis for making such predictions with any assurance they will be correct.[12]

Additionally, should such predictions prove inaccurate, the consequences, to both employers and the public at large, could be dire.

(c) How burdensome is this guidance to follow?

Epstein explains and offers a cogent example:

To the unpracticed eye, the EEOC ruling looks genuinely perverse. The law that was intended to end discrimination by private parties now institutionalizes it by government. Title VII of the 1964 Civil Rights Act has, as its purpose, to make it "an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual... because of such individual's race, color, religion, sex, or national origin."

Thus, the newest confection out of the EEOC orders most employers to do exactly what the law forbids. It introduces an explicit classification into the hiring equation by imposing a higher standard for refusing to hire minority workers than for others. The Enforcement Guidance also applies even when it is clear that the employer's refusal to hire certain workers is not because of race but because of the evident risk that a criminal record could present to the employer, its other employees, and its customers.

The EEOC introduces what is termed "disparate treatment" by race in its supposed effort to prevent discrimination. The results are perverse at best. To take just one example, James Bovard, writing in the Wall Street Journal, reports that in 2010, the EEOC initiated litigation against G4S Secure Solutions "after the company refused to hire a twice-convicted Pennsylvania thief as a security guard." Needless to say, the EEOC did not offer to indemnify G4S should they be held liable for any torts of their employee while on the job.

(d) What is the factual predicate for the guideline?

Although the EEOC did not and cannot establish that the higher rate of incarceration of Black and Hispanic men than white men was due to any bias in the criminal justice system, the disparate rates are its only factual predicate for demanding employers engage in disparate hiring treatment.

Since the disparity is not due to discrimination how can preferential treatment be justified?

The illogic of the guidance and the enormous hoops that employers have to go through if it is not rescinded are also underscored by Epstein, who notes the same disparate treatment of employers that Spakovsky does :

The EEOC's useless Enforcement Guidance only offers far-fetched examples at best. Additionally, the guidance neglects to tell an employer, who may receive hundreds of applications for a single position, how to make a detailed "individuated assessment" of each applicant and still remain economically viable. Nor does it say whether an employer remains in violation of Title VII by turning down ten minority applicants with criminal records after hiring the eleventh.

What makes this entire approach even more bizarre is that many agencies of the federal government make the same use of criminal conviction records that the EEOC demands that all states and private employers reject. At no point, however, does the EEOC claim that these federal agencies discriminate in any way. Nor does the EEOC address why it thinks these federal agencies are misguided in making their own considered judgments regarding the hiring of employees

(e) Other Consequences

Along with increasing the workload of employer counsel and necessitating the hiring of more human resource officers, which does not add to the employer's bottom line, employers are put in a real Scylla and Charybdis dilemma. On one hand there's the danger of an EEOC proceeding if it doesn't hire the ex-con; on the other there are hungry litigation lawyers waiting to sue if their client comes to harm because the employer failed to perform a criminal background check under the doctrine of "negligent hiring".

(f) Is there nevertheless some clear benefit to discriminating in favor of minority ex-cons?

Both Spakovsky and Epstein argue there is not.

Epstein:

Some studies already suggest that firms are "much less likely to hire minority applicants when background checks are banned." That result should not come as any surprise. The white male workers who are not protected by Title VII can offer employees this precious guarantee: the ability to hire and fire at will. Minority workers cannot waive their ill-conceived protections under Title VII, and thus are prevented from competing along this critical dimension. The EEOC Guidance may help some minority workers in a few cases, but it will hurt even more.

Spakovsky:

Finally, it is likely that the EEOC's Guidance will make it more difficult for certain racial and ethnic minorities to find employment. Specifically, employers who do not use criminal background checks may be less likely to hire African Americans and Hispanics. Those employers may use race as a proxy for past criminal history:

[In the absence of the salutary information that may be provided by a criminal background check, especially where a candidate has a weak employment history, some employers discriminate statistically against black men. If the tendency of employers is to overestimate the likelihood that African-American job applicants have prior felony convictions, systematic background checks may actually increase the likelihood that an African-American applicant is hired.[18]

Thus, rather than helping minorities as it may have been intended to do, the EEOC's Guidance will have the opposite effect.

Using survey data from the Multi-city Study of Urban Inequality from over 3,000 establishments, one 2006 study concluded that "employers who check criminal backgrounds are more likely to hire African American workers, especially men [and t]his effect is stronger among those employers who report an aversion to hiring those with criminal records than among those who do not."[19] Another 2009 study based on a survey of over 600 establishments found that "when employers do criminal background checks during hiring, the hiring rates of black men increase."[20] This "counterintuitive finding" shows that a background check actually counteracts the effect that the higher incidence of criminal convictions among African-American job applicants has on their employment prospects.

A few months ago the U.S. Civil Rights Commission held hearings on the enforcement guidance and three members of the Civil Rights Commission -- Commissioners Kirsanow, Heriot, and Gaziano -- asked that studies showing this effect be included in the Commission's record.

In sum, we have here an enforcement guidance with the practical force of a regulation, issued without public comment or input by an agency that lacks authority to issue regulations, a guidance which discriminates against white and Asian applicants at the same time it hurts minority job applicants and which places employers in an impossible legal dilemma

What is its present posture?

While there is as yet no report from the Civil Rights Commission, Congress has taken some action.

Of course, the EEOC should be directed by Congress to withdraw this ill-conceived "guidance". In the meantime Congress approved an amendment to the Commerce, Justice and Science appropriations bill that prohibits the use of EEOC funds to enforce it. The Senate Appropriations Committee also weighed in and issued a report critical of the guidance.

Surely, it's time to do more to end this outrageous administrative overreaching. 

With no authority to do so and with flawed factual support, the EEOC has issued an enforcement guideline that would compel employers to discriminate in favor of minority ex-cons. It's past time for Congress to rein in the EEOC and make them withdraw this directive by other name.

(a) The EEOC Enforcement Guidance Procedure

Over 89 million Americans are presently out of the labor force. The New York Times seems to offer a muddled explanation for the fact that employers have money to hire but aren't doing so even when they need extra help.

The Federal Reserve's vision is less cloudy. In its latest beige book the Fed indicates that uncertainty about the
impact and requirements of Obamacare is playing a significant role in the national job freeze cutting into sales and hiring.

Of course, it's a major factor, but it is just one large example of the many regulations and actions by federal agencies -- entities with a great deal of power which bear no responsibility for their bad decisions -- that hamper the market and impoverish the nation.


Nothing so illustrates the foolish nature of these restrictions than the EEOC 's effort to compel employers to forego criminal background checks because ex-cons are more likely to be minorities -- a matter ably documented by a very critical Professor Richard A. Epstein.

To understand the genesis of this overreaching, a brief review is in order. As life became more complex, Congress passed laws allowing some details in legislation to be set by administrative agencies. In 1946, believing the agencies were exceeding their authority, Republicans in Congress passed the Administrative Procedure Act (APA) of 1946 which set some limits on the delegation of authority, particularly it set in place a notice and comment procedure which would allow interested parties to weigh in on issues before regulations were written.

Even so, not every agency was even granted regulatory power. Congress denied the EEOC the power to issue regulations at all. So, the agency adopted this rule requiring the hiring of minority ex-cons (with limitations discussed below) with no public impact, using a dodge called "enforcement guidelines".

While such "enforcement guidances" lack the force of law, employers ignore them at the risk of protracted and expensive litigation. Indeed, employers' counsel warns them of this:

While the Enforcement Guidance does not have the force of law, it is nonetheless a clear indication of how the EEOC will view employer requests for arrest and conviction information in assessing charges of discrimination. Taking time to review your policies with this guidance in mind may allow you to avoid future confrontations with the EEOC.

Congress can reassert its authority and make regulations more sensible by forbidding the use of enforcement guidelines as an end run around the APA and if anything indicates why this is essential, this case does.

(b) What does this Enforcement Guidance Provide?

Epstein summarizes the guideline as follows:

With the Enforcement Guidance, all private employers and all state employers must use detailed and particularized inquiries before turning down a minority applicant who has a criminal arrest or conviction on his record, even though employers can turn down a white applicant with the same past record without going through such hoops.

(The extensive and difficult to traverse hoops the EEOC has set up makes it likely that unless withdrawn, the guideline will encourage employers to forego criminal checks.)

Hans A. von Spakovsky, a former counsel to the Assistant Attorney for Civil Rights at the U.S. Department of Justice who is also highly critical of this guidance, notes it has some exceptions, exceptions which show that the EEOC recognizes -- when it chooses to -- the dangers of hiring ex-cons and the great risk or recidivism they pose:

The EEOC ignores this generalized risk at the very same time that it recognizes that its restrictions cannot be applied to certain industries -- because of that very risk. For example, the Guidance notes that federal law excludes certain felons from working as security screeners or otherwise having unescorted access to the secure areas of any airport and that there are equivalent requirements for federal law enforcement officers, child care workers in federal agencies or facilities, bank employees, and port workers. In other words, blanket exclusions based on the risk of repeated criminal behavior -- exclusions that cause disparate impact -- are legitimate when imposed by the federal government. However, these same exclusions are somehow suspect and discriminatory when imposed by private industry.

The EEOC also dismisses the well-established evidence regarding the recidivism of felons. To be certain, the propensity of an individual with a criminal record to commit a future crime may decrease as the length of time that he is crime-free increases, but such an individual cannot:

[B]e judged to be less or equally likely to commit a future violent act than comparable individuals who have no prior violent history. It is possible that those differences might be small, but making such predictions... is extremely difficult, and the criminological discipline provides no good basis for making such predictions with any assurance they will be correct.[12]

Additionally, should such predictions prove inaccurate, the consequences, to both employers and the public at large, could be dire.

(c) How burdensome is this guidance to follow?

Epstein explains and offers a cogent example:

To the unpracticed eye, the EEOC ruling looks genuinely perverse. The law that was intended to end discrimination by private parties now institutionalizes it by government. Title VII of the 1964 Civil Rights Act has, as its purpose, to make it "an unlawful employment practice for an employer to fail or refuse to hire or to discharge any individual... because of such individual's race, color, religion, sex, or national origin."

Thus, the newest confection out of the EEOC orders most employers to do exactly what the law forbids. It introduces an explicit classification into the hiring equation by imposing a higher standard for refusing to hire minority workers than for others. The Enforcement Guidance also applies even when it is clear that the employer's refusal to hire certain workers is not because of race but because of the evident risk that a criminal record could present to the employer, its other employees, and its customers.

The EEOC introduces what is termed "disparate treatment" by race in its supposed effort to prevent discrimination. The results are perverse at best. To take just one example, James Bovard, writing in the Wall Street Journal, reports that in 2010, the EEOC initiated litigation against G4S Secure Solutions "after the company refused to hire a twice-convicted Pennsylvania thief as a security guard." Needless to say, the EEOC did not offer to indemnify G4S should they be held liable for any torts of their employee while on the job.

(d) What is the factual predicate for the guideline?

Although the EEOC did not and cannot establish that the higher rate of incarceration of Black and Hispanic men than white men was due to any bias in the criminal justice system, the disparate rates are its only factual predicate for demanding employers engage in disparate hiring treatment.

Since the disparity is not due to discrimination how can preferential treatment be justified?

The illogic of the guidance and the enormous hoops that employers have to go through if it is not rescinded are also underscored by Epstein, who notes the same disparate treatment of employers that Spakovsky does :

The EEOC's useless Enforcement Guidance only offers far-fetched examples at best. Additionally, the guidance neglects to tell an employer, who may receive hundreds of applications for a single position, how to make a detailed "individuated assessment" of each applicant and still remain economically viable. Nor does it say whether an employer remains in violation of Title VII by turning down ten minority applicants with criminal records after hiring the eleventh.

What makes this entire approach even more bizarre is that many agencies of the federal government make the same use of criminal conviction records that the EEOC demands that all states and private employers reject. At no point, however, does the EEOC claim that these federal agencies discriminate in any way. Nor does the EEOC address why it thinks these federal agencies are misguided in making their own considered judgments regarding the hiring of employees

(e) Other Consequences

Along with increasing the workload of employer counsel and necessitating the hiring of more human resource officers, which does not add to the employer's bottom line, employers are put in a real Scylla and Charybdis dilemma. On one hand there's the danger of an EEOC proceeding if it doesn't hire the ex-con; on the other there are hungry litigation lawyers waiting to sue if their client comes to harm because the employer failed to perform a criminal background check under the doctrine of "negligent hiring".

(f) Is there nevertheless some clear benefit to discriminating in favor of minority ex-cons?

Both Spakovsky and Epstein argue there is not.

Epstein:

Some studies already suggest that firms are "much less likely to hire minority applicants when background checks are banned." That result should not come as any surprise. The white male workers who are not protected by Title VII can offer employees this precious guarantee: the ability to hire and fire at will. Minority workers cannot waive their ill-conceived protections under Title VII, and thus are prevented from competing along this critical dimension. The EEOC Guidance may help some minority workers in a few cases, but it will hurt even more.

Spakovsky:

Finally, it is likely that the EEOC's Guidance will make it more difficult for certain racial and ethnic minorities to find employment. Specifically, employers who do not use criminal background checks may be less likely to hire African Americans and Hispanics. Those employers may use race as a proxy for past criminal history:

[In the absence of the salutary information that may be provided by a criminal background check, especially where a candidate has a weak employment history, some employers discriminate statistically against black men. If the tendency of employers is to overestimate the likelihood that African-American job applicants have prior felony convictions, systematic background checks may actually increase the likelihood that an African-American applicant is hired.[18]

Thus, rather than helping minorities as it may have been intended to do, the EEOC's Guidance will have the opposite effect.

Using survey data from the Multi-city Study of Urban Inequality from over 3,000 establishments, one 2006 study concluded that "employers who check criminal backgrounds are more likely to hire African American workers, especially men [and t]his effect is stronger among those employers who report an aversion to hiring those with criminal records than among those who do not."[19] Another 2009 study based on a survey of over 600 establishments found that "when employers do criminal background checks during hiring, the hiring rates of black men increase."[20] This "counterintuitive finding" shows that a background check actually counteracts the effect that the higher incidence of criminal convictions among African-American job applicants has on their employment prospects.

A few months ago the U.S. Civil Rights Commission held hearings on the enforcement guidance and three members of the Civil Rights Commission -- Commissioners Kirsanow, Heriot, and Gaziano -- asked that studies showing this effect be included in the Commission's record.

In sum, we have here an enforcement guidance with the practical force of a regulation, issued without public comment or input by an agency that lacks authority to issue regulations, a guidance which discriminates against white and Asian applicants at the same time it hurts minority job applicants and which places employers in an impossible legal dilemma

What is its present posture?

While there is as yet no report from the Civil Rights Commission, Congress has taken some action.

Of course, the EEOC should be directed by Congress to withdraw this ill-conceived "guidance". In the meantime Congress approved an amendment to the Commerce, Justice and Science appropriations bill that prohibits the use of EEOC funds to enforce it. The Senate Appropriations Committee also weighed in and issued a report critical of the guidance.

Surely, it's time to do more to end this outrageous administrative overreaching. 

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