April 10, 2012

Chamber Urges OMB to Require EEOC To Open Process on Background Checks

Editor’s Note:  The letter from the Chamber to OIRA is attached below.

From: Bloomberg/BNA

By Kevin P. McGowan

The U.S. Chamber of Commerce is urging the Obama administration to compel the Equal Employment Opportunity Commission to allow public input as the agency ponders issuing new enforcement guidance regarding employers’ use of criminal background and credit checks.

In an April 2 letter to Office of Management and Budget official Cass Sunstein, the chamber said EEOC’s potential guidances on both topics warrant OMB’s review for procedural and substantive reasons.

“By all accounts the EEOC is now preparing to approve these significant guidance documents without making them available for public comments and without seeking review by [OMB],” the chamber told Sunstein, head of OMB’s Office of Information and Regulatory Affairs.

The chamber said that although EEOC has held public meetings “on the very broad topics” of employers’ use of background checks and individual commissioners have met with agency stakeholders to hear their concerns, EEOC “has not shared its draft guidance for the opportunity to provide comment.”

“[A]t this stage, members of the public can only guess as to the direction that the guidance will take,” the chamber said. “This is contrary to the strong public policy favoring pre-adoption notice and comment on guidance documents.”

The chamber urged OMB to ensure that EEOC does not finalize guidance until it has been properly reviewed by OMB and made available for public notice and comment.

EEOC confirmed April 3 that the agency has received the chamber’s letter but declined to comment on its substance.

“[EEOC] has held public meetings on employer use of credit and criminal background checks and has solicited input from all stakeholder perspectives, and will continue to do so as we examine these issues,” an agency spokeswoman said.

EEOC Has Focused on Potential Bias.

Sources outside EEOC have told BNA that EEOC’s five commissioners are currently reviewing a draft that would update the agency’s existing guidance on employers’ use of arrest and conviction records. But EEOC would not confirm that.

The agency held a July 2011 public meeting on the potential discrimination resulting from employer policies that bar the hiring of persons with past convictions (29 HRR 821, 8/1/11). EEOC previously had considered the issue at a November 2008 meeting (26 HRR 1313, 12/1/08).

In October 2010, EEOC held a public meeting at which witnesses testified about the potential discriminatory effects of employers using applicants’ credit histories as a hiring criterion (28 HRR 1127, 10/25/10). Since then, various agency officials have said EEOC might develop a separate enforcement guidance regarding employers’ use of credit histories as part of background checks.

At a March 13 conference co-sponsored by the chamber, employer representatives expressed concern about potential liability and public safety implications if retailers and other businesses are constrained from performing criminal background checks on job applicants and current employees (30 HRR 285, 3/19/12).

The chamber cited Sunstein’s previous remarks that OMB is interested in hearing concerns about federal agency guidance as well as a January 2007 OMB bulletin indicating that “pre-adoption notice and comment can be most helpful for significant guidance documents that are particularly complex, novel, consequential, or controversial.”

EEOC has an “unfortunate past practice” of developing enforcement guidance in private and then declining to rescind such guidance even after courts have “uniformly rejected” the agency’s views, the chamber said. For example, the chamber said, EEOC’s 1997 guidance condemning pre-dispute agreements to arbitrate discrimination claims as inconsistent with Title VII still appears on the agency’s website “without any notation that courts have uniformly rejected it.”

Employers also have substantive concerns that EEOC’s potential guidance on criminal convictions and credit checks “will remove or significantly limit the use of two important tools that employers use in hiring and related decisions,” the chamber said.

Chamber-OIRA Letter

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