April 16, 2025
The California Civil Rights Department (CRD) has announced a settlement agreement with an Iowa-based trucking and logistics provider. This settlement addressed allegations that the employer illegally pulled a job offer over an applicant’s criminal history.
According to the allegations, the company violated the California Fair Chance Act. As a result, the company agreed to pay the applicant $100,000 and take other corrective actions. The California Fair Chance Act took effect in 2018. It introduced several key limitations on how employers can use criminal history information in the hiring process. The California Fair Chance Act prohibits employers from inquiring about an applicant’s criminal history before issuing a conditional offer of employment. Only after making a job offer can employers perform a criminal background check. Furthermore, the Act requires employers to individually assess convictions before considering adverse employment-related decisions. Based upon this assessment, employers must make a direct and adverse connection between any convictions and the specific duties of the job for which they are seeking.
In this case, the CRD received a complaint in 2023 alleging that the employer violated the California Fair Chance Act. This violation involved rejecting an applicant’s criminal history for a senior leadership position based on their criminal history. The complaint claimed that the applicant had received a conditional offer and authorized a background check. However, the applicant argued that the company rescinded the offer after the background check. Allegedly, the company based this decision on prior convictions without allowing an individualized assessment. Such assessments typically consider the nature, severity, relation to the position, or time elapsed since the offense occurred.
The CRD began an investigation into the incident in response. As a part of this, the CRD allowed both parties to engage in conciliation. This offer encouraged a direct resolution to the claims before the CRD concluded its investigation. As a result of the conciliation, the parties have reached a settlement requiring the employer to compensate the complainant with $100,000. In addition, the employer would accomplish the following:
- Provide personnel involved with hiring or employment-related decisions with training on the Fair Chance Act,
- Conduct a review of its policies to ensure compliance with the Fair Chance Act, and
- Report all changes to the CRD within 45 days.
This settlement illustrates the importance of ensuring compliance with all local, state, and federal regulations governing the employment screening process and use of criminal history information. It is crucial to review all employment-related processes and make changes as necessary regularly.
Disclaimer:
Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.