California Cracks Down on Employers’ Use of Criminal Background Information

By Kate S. Gold and Jessica A. Burt

California employers using employees’ criminal convictions to make employment-related decisions should be aware of the recent flurry of new regulations and pending state legislation that place increased limitations on employers’ use of such information.

New FEHC Regulations Prohibit Consideration of Criminal History When Doing So Has An Adverse Impact On Individuals in A Protected Class

California’s Fair Employment and Housing Commission (FEHC) issued new regulations on employers’ use of criminal background information when making employment decisions, including hiring, promotion, discipline, and termination. The new regulations take effect on July 1, 2017, and are intended to clarify how the use of criminal background information may violate the provisions of the Fair Employment and Housing Act (“FEHA”).  The regulations prohibit employers from seeking or using any criminal history information that has an adverse impact on an individual within a protected class, such as race, national origin or gender. The new regulations provide that an adverse impact may be established through the use of state or national level statistics or by offering “any other evidence” that establishes an adverse impact.

If an employee or job applicant can demonstrate that an employer’s criminal background check policy or practice creates an adverse impact, the burden shifts to the employer to prove that the policy or practice is nonetheless justifiable because it is: (1) job-related and (2) consistent with business necessity. The criminal conviction policy or practice must bear a demonstrable relationship to successful performance on the job and measure the person’s fitness for the specific position, not merely evaluate the person in the abstract.  An employer must demonstrate that the criminal background check policy is “appropriately tailored” to the job, taking into account: (i) the nature and gravity of the offense; (ii) the amount of time that has passed since the offense and/or since the sentence for the offense was completed; and (iii) the nature of the job the employee holds or seeks.

An employer can demonstrate that its policies or practices are “appropriately tailored” to the job by either: (1) conducting an individualized assessment of the circumstances and qualifications of the applicant or employee and providing the individual with notice (before any adverse action is taken) that he or she has been excluded based on a conviction and affording the individual an opportunity to show that the criminal history exclusion should not apply due to their particular circumstances; or (2) demonstrating that a “bright line” rule regarding conviction disqualification can distinguish between those employees who actually pose an unacceptable risk and that the convictions being used to disqualify, or otherwise adversely impact the status of the employee or applicant, have a direct and specific negative bearing on the person’s ability to perform the duties or responsibilities necessarily related to the position.

The new regulations further provide that any bright-line policy that includes conviction-related information that is seven or more years old is subject to a rebuttable presumption that the policy is not specifically tailored to meet the job-related and consistent with business necessity defense.

Under the new regulations, even if an employer’s background check policy meets the new stringent standard, employers may still be liable if an individual employee can demonstrate that there is a less discriminatory policy or practice that serves the employer’s goals as effectively, such as a more narrowly targeted list of convictions or another form of inquiry that evaluates job qualification or risk as accurately.

Employers that are required to comply with federal or state laws or other regulations that mandate a criminal history screening process or require an employee or applicant to possess or obtain a required occupational license can rely on the applicable laws as a defense to an adverse impact claim.

The Regulations Require Employee Notification of an Adverse Action and Opportunity to Present Evidence of Factual Inaccuracy

The federal Fair Credit Reporting Act currently requires employers to provide notice to employees or job applicants when an adverse employment decision is made based on information obtained by an employer through a background check. In addition, the FEHC’s new regulations require that employers notify an employee or applicant of the disqualifying criminal conviction if the information was obtained from any source other than the applicant or employee (e.g., through a consumer report or internally generated search).

Under the regulations, the employee or applicant must be given a “reasonable opportunity to present evidence that the information is factually inaccurate,” and the criminal record may not be considered if the employee establishes that the information is inaccurate.

Similar Pending California Legislation

Employers should also note that pending Assembly Bill (AB) 1008 goes even further than the FEHC regulations and would make it unlawful for a California employer to: (1) include on any job application questions that seek the disclosure of an applicant’s criminal history; (2) inquire or consider an applicant’s prior convictions before extending a conditional offer of employment; and (3) when conducting a criminal background check, to consider, distribute, or disseminate information on (i) an arrest not followed by conviction, (ii) referral to or participation in a pretrial diversion program, (iii) convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law, (iv) misdemeanor convictions for which no jail sentence can be imposed, or (v) misdemeanor convictions for which three years have passed since the date of conviction or felony convictions for which seven years have passed since the date of conviction.

If passed, AB 1008 would also require California employers that intend to deny employment to an applicant because of prior convictions to perform an individualized assessment of whether the applicant’s criminal history has a direct and adverse relationship to the specific job duties. The employer must then notify the applicant of the reasons for the decision and provide the applicant with 10 days to respond and challenge the accuracy of the information or provide evidence of rehabilitation, which the employer must then consider before making a final employment decision.

The bill is scheduled for a hearing before the California Committee on Labor and Employment on May 3, 2017.

Best Practices for California Employers Conducting Criminal History Checks

California employers that screen applicants and employees for criminal convictions should review and evaluate their criminal conviction policies, background check policies, and job applications for compliance with the new regulations and, potentially, for compliance with pending AB 1008.

Spring Cleaning in California: The Fair Employment and Housing Council’s New Regulations

By Philippe A. Lebel

On April 1, 2016, the California Fair Employment and Housing Council’s (FEHC) new Fair Employment and Housing Act (FEHA) regulations take effect. The overarching purpose of the new FEHC regulations is to harmonize the regulations with recent court decisions. However, employers should take note of some of the more significant changes the new regulations impose, including:  (a) expanding and clarifying the scope of employers covered under the FEHA; (b) requiring employers to develop specific, detailed anti-discrimination/anti-harassment policies and internal procedures; and (c) enlarging employers’ training and related recordkeeping obligations. Notably, the new regulations also clarify employers’ potential liability for claims regarding alleged failure to prevent unlawful harassment or discrimination, as well as the remedies available.

More Employers Are Covered

The FEHA only covers employers who regularly employ five or more persons.  See Cal. Gov’t Code § 12926(d). Under the prior regulations, to “regularly employ” five or more individuals meant that the employer employed five or more individuals in each working day in any 20 consecutive calendar weeks in the current or preceding calendar year. The new regulations further clarify that, in determining whether an employer regularly employs five or more individuals, consideration must be given to out-of-state employees. Thus, under the new regulations, an employer who employs only three employees in California is still an “employer” for purposes of the FEHA if it employs two or more employees outside of California (see footnote 1). The new regulations further clarify that, in counting the number of employees, individuals on leaves of absence or suspensions are counted.

Expanded Anti-Harassment, Anti-Discrimination, And Anti-Retaliation Policy And Procedure Requirements

Under the FEHA, employers have an affirmative obligation to prevent unlawful harassment and/or discrimination. To that end, pursuant to California Government Code Section 12950(b), employers are (and have been) required to distribute the DFEH’s brochure (DFEH-185) on unlawful sexual harassment, or provide the information in a comparable writing. However, the FEHC’s new regulations mandate that, in addition to the preexisting obligation with respect to providing the DFEH’s brochure (or comparable information), employers must now promulgate their own anti-discrimination and anti-harassment policies that satisfy a variety of detailed requirements.

Specifically, under the new regulations, employers’ anti-discrimination/anti-harassment policies must:

  • • Be in writing;
  • • List all current protected categories covered under the FEHA;
  • • Indicate that the FEHA prohibits coworkers and third parties, as well as supervisors and managers, with whom the employee comes into contact from engaging in conduct prohibited by the FEHA;
  • • Create a complaint process to ensure that complaints receive:
    • -An employer’s designation of confidentiality, to the extent possible;
    • -A timely response;
    • -Impartial and timely investigations by qualified personnel;
    • -Documentation and tracking for reasonable progress;
    • -Appropriate options for remedial actions and resolutions; and
    • -Timely closures.
  • •Provide a complaint mechanism that does not require an employee to complain directly to his or her immediate supervisor, including, but not limited to the following:
    • -Direct communication, either orally or in writing, with a designated company representative, such as a HR manager, EEO officer, or other supervisor;
    • -A complaint hotline;
    • -Access to an ombudsperson; and/or
    • -Identification of the Department of Fair Employment and Housing (DFEH) and the U.S. Equal Employment Opportunity Commission as additional avenues for employees to lodge complaints.
  • •Instruct supervisors to report any complaints of misconduct to a designated company representative, so that the company can try to resolve the claim internally (see footnote 2);
  • •Indicate that when an employer receives complaints, it will conduct a fair, timely, and thorough investigation that provides all parties appropriate due process and reaches reasonable conclusions based on the evidence collected;
  • •State that confidentiality will be kept by the employer to the extent possible, but not indicate that the investigation will be completely confidential;
  • •Indicate that if, at the end of the investigation, misconduct is found, appropriate remedial actions will be taken; and
  • •Make clear that employees shall not be exposed to retaliation as a result of lodging a complaint or participating in any workplace investigation.

Under the new FEHC regulations, employers must disseminate their policies by one or more of the following methods:

  1. Providing printed copies of the policies to all employees with an acknowledgment for employees to sign and return;
  2. Sending the policies via email with an acknowledgment return form;
  3. Posting current versions of the policies on a company intranet with a tracking system to ensure that all employees have read and acknowledged receipt of the policies;
  4. Discussing the policies upon hire and/or during new employee orientation/training; and/or
  5. “Any other way that ensures employees receive and understand the policies.”

In addition to providing the policies in English, any employer whose workforce contains 10 percent or more of persons who speak a language other than English must translate their policies into any language(s) spoken by 10 percent or more of their workforce.

Updated Training And Related Recordkeeping Requirements

Pursuant to section 12950.1 of the California Government Code, employers with 50 or more employees have been and are required to provide supervisory employees with a minimum of two hours of sexual harassment training. Pursuant to the new FEHC regulations, in addition to satisfying the existing statutory requirements, the mandatory training must also:

  • •Instruct supervisory employees of their obligation to report potential sexual harassment, discrimination, and/or retaliation of which they become aware;
  • •Provide an overview of the remedies available for sexual harassment victims in civil actions, as well as potential employer/individual exposure and liability; and
  • •Cover “abusive conduct,” as used in Government Code section 12950.1 (see footnote 3), in a “meaningful manner,” including by:  (a) providing a definition of abusive conduct; (b) explaining the negative effects of abusive conduct on the victim and others in the workplace; (c) specifically discussing the elements of abusive conduct; (d) providing examples of abusive conduct; and (e) emphasizing that, unless the conduct is especially severe or egregious, a single act shall not constitute abusive conduct.

In addition to the above updated training requirements, the new FEHC regulations require employers to maintain training-related records for at least two years. Records to be maintained include, but are not limited to:  (a) the names of the participants; (b) the dates of the trainings; (c) sign-in sheets; (d) copies of all certificates of attendance or completion; (e) information regarding the type of training; (f) copies of all written or recorded materials comprising the trainings; and (g) the name of the training provider.

Clarifying Liability For Failure To Prevent Unlawful Discrimination Or Harassment

Recent case law confirmed that California employers cannot be held liable in a civil action for a stand-alone claim for failure to take reasonable steps necessary to prevent sexual harassment or discrimination if there is no underlying unlawful harassment or discrimination. The new FEHC regulations codify that authority and take it further in several respects:

  • •First, the regulations clarify that, in undertaking the individualized assessment of whether an employer failed to take all reasonable steps to prevent unlawful discrimination or harassment, consideration should be given to a variety of factors, including, but not limited to:  (a) the size of the employer’s workforce; (b) the employer’s budget; (c) the nature of the employer’s business; and (d) the facts of each particular case.
  • •Second, the regulations provide that the DFEH may independently seek non-monetary preventative remedies for an employer’s failure to take all reasonable measures to properly prevent harassment or discrimination even if there is no underlying liability for discrimination, harassment, or retaliation.

Take Aways

California employers (and any out-of-state employers with at least five employees total and one employee in California) should promptly review and revise their anti-discrimination and anti-harassment policies. In conjunction with that effort, employers should ensure that their procedures with respect to disseminating policies and handling employee complaints satisfy the new requirements. Employers with 50 or more employees should ensure that their sexual harassment trainings encompass the additional topics and should begin retaining all records relating to such trainings for at least two years. For assistance with ensuring compliance, employers should seek advice from qualified California employment counsel.


  1. While such out-of-state employees are counted in determining whether an employer falls under the FEHA’s ambit, the new FEHC regulations clarify that out-of-state employees “are not themselves covered by the protections of the … FEHA if the wrongful conduct did not occur in California and …was not ratified by decision makers or participants located in California.”
  2. For employers with 50 or more employees, mandatory sexual harassment training must also instruct supervisors to report any complaints of misconduct to a designated company representative.
  3. See California AB 2053, effective January 1, 2015.

New Year, New Laws for California Employers – Religious Dress and Grooming Protected and Breastfeeding Further Protected

Next in our series, “New Year, New Laws for California Employers,” we take a look at new protections given to Religious Dress and Grooming and Breastfeeding under the California Fair Employment and Housing Act.  Prepared by  Mark Terman, partner in the Los Angeles office, this series looks at some of the significant new regulations becoming law in 2013 affecting private employers doing business in California.

Religious Dress and Grooming Protected

California employers should know that the Fair Employment and Housing Act protects the right of individuals to seek, obtain and hold employment without discrimination on account of religions creed, observance and belief. Similarly, employers are required to reasonably accommodate religious belief or observance of an individual unless the accommodation would be an undue hardship to the employer.

AB 1964 extends these protections to “religious dress practice” and “religious grooming practice.” Religious dress practice includes the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts and any other item that is part of the individual’s observance of his or her religious creed. Religious grooming practice includes all forms of head, facial and body hair that are part of the individual’s religious observance.

This law may cause some employers to act with more tolerance of religious practices than in the past. For example, the law also states that an accommodation is not reasonable if it requires segregation of the employee from the public or other employees. As such, employees who interface with clients or customers may not be disqualified from those positions based upon their religious dress or grooming. Because the bill does not state that it supersedes existing health and safety laws and regulations, workplace safety rules—such as dress and grooming required of employees who operate machinery—should not be affected by the new law.

Breastfeeding Further Protected

The FEHA also protects against discrimination in employment on the basis of sex, which includes gender, pregnancy, childbirth and medical conditions related to pregnancy and childbirth. AB 2386 adds breastfeeding and medical conditions related to breastfeeding to the FEHA’s definition of “sex.” This clarification in the law, also dovetails with Labor Code secs. 1030-1033, which require reasonable amounts of break time and an adequate private place for mothers to express breast milk at work.

See our earlier post in this series here.

Are Partners Protected by the Provisions of FEHA and/or Title VII?

By: Pascal Benyamini

According to the California Court of Appeal, a partner in a partnership is protected under the provisions of the California Fair Employment Housing Act  (“FEHA”)  if the partner complains that the partnership is retaliating against the partner because the partner complained about unlawful discrimination or harassment by the partnership against employees of the partnership.  In Fitzsimons v. California Emergency Physicians Medical Group, the California Court of Appeal drew a distinction between a partner alleging discrimination, harassment or retaliation by the partnership against the partner versus the partner complaining that the partnership is retaliating against the partner because the partner complained about unlawful discrimination or harassment by the partnership against employees of the partnership. Say that again?

Here’s what happened in the Fitzsimons case.  The plaintiff (a woman partner in the medical practice) claimed that she was retaliated against for reporting that certain male officers and agents of the partnership had sexually harassed female employees.  So, the issue was not whether the plaintiff could sue the partnership for sexual harassment against herself as an employee, but whether plaintiff could sue the partnership as a non-employee based on retaliation for complaining that employees of the partnership were sexually harassed.  The Court held that under the FEHA, the partner can maintain such an action, even though the partner is not deemed an employee of the partnership.

The Court drew a distinction between the provisions of Title VII and the FEHA by highlighting that Title VII and the FEHA differ significantly.  The Court explained that Title VII prohibits employers from retaliating against employees or applicants for employment, whereas the FEHA prohibits employers from retaliating against any person who opposes or challenges unlawful employment practices, such as discrimination or harassment.  In Fitzsimons, the plaintiff was regarded  as “any person” who opposed harassment of female employees by the officers and agents of the partnership.

Moral of the story: just because a partner is not regarded as an employee of the partnership, the partner still can sue the partnership for retaliation under the FEHA.  The case is attached here: Fitzsimons v. California Emergency Physicians Medical Group.