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Texas Earns a Win in EEOC Fight

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On August 6, 2019, the Fifth Circuit Court of Appeals weighed in on Texas’ fight against the Equal Employment Opportunity Commission (EEOC) criminal records guidance.

Case Background

Texas sued the EEOC in November 2013 following publication in 2012 of the EEOC’s guidance on the use of criminal and arrest records in employment decisions. In the guidance, the EEOC noted that a state law requirement to not hire an individual based on criminal conviction information may not be a sufficient protection to claims of discrimination under Title VII.
 
Texas took issue with that sentiment in particular as several public jobs requires exclusions for particular felony convictions based on state law. In fact, following the release of the guidance (which notably is not law), an individual who was rejected for a Department of Public Safety job filed a complaint with the EEOC alleging the no-felon hiring policy created a disparate impact in violation of Title VII.
 
Since November 2013, the case has been on quite the legal rollercoaster with wins and losses on both sides. In July 2017, the NAACP, NELP and other private law firms even tried to intervene following concerns President Trump’s administration would not “zealously” defend the EEOC.

Fifth Circuit Court of Appeals Decision

Fast forward to August 2019, the Fifth Circuit Court of Appeals dealt a measured blow to the EEOC. First, the court determined the guidance binds the EEOC as it directs decisions about employer-related enforcement actions. In so deciding, the court pointed to several factors including the fact that the guidance “explicitly declares that it is intended to be a playbook for employers to use to avoid liability, and it describes ‘best practices’ for employers.” The court then turned to whether Texas has standing to sue the EEOC and the Attorney General, finding state employers are covered by Title VII and that Texas suffered injuries as a result of the guidance.
 
The court then turned to the real meat of the matter siding with Texas’ viewpoint that the guidance is a substantive rule subject to the federal Administrative Procedure Act notice-and-comment requirement which the EEOC did not undertake. Thus, according to the court, the EEOC “overstepped it statutory authority in issuing the Guidance.” Ultimately the court modified the injunction issued previously by the district court and made clear that the EEOC and Attorney General cannot treat the guidance as binding.

Next Steps

Employers should review this court decision with qualified legal counsel given that the decision was limited to the state of Texas as an employer – and was not broadly drafted to apply to all private employers. This one court decision likely will not put an end to the guidance or the EEOC’s pursuit of discrimination claims related to employer use of criminal background checks. Thus, employers should continue reviewing their hiring and training procedures with their legal counsel taking into consideration the best practices outlined in the EEOC’s criminal records guidance.