The NYC Commission on Human Rights (the Commission) has released updated enforcement guidance regarding the Fair Chance Act.  New York City amended the Fair Chance Act last year and those changes will go into effect on July 29, 2021. 

The amended Fair Chance Act (FCA) features two significant changes for employers:

• extending the law to existing employees and independent contractors (it previously only applied to applicants for employment); and

• extending the fair chance process to pending arrests (it previously only applied to past criminal history). 

Other less significant changes, though still noteworthy, include:

• expanding the types of criminal history about which an employer may never inquire;

• creating a new set of Fair Chance factors to apply under certain circumstances when analyzing the criminal history; and

• providing an individual with an opportunity to respond before an employer acts on an apparent misrepresentation about criminal history. 

There’s more, and you can read all about the changes in our summary post here.  Below we summarize the important takeaways from the Commission’s updated enforcement guidance. 

1. Do Not Ask About Non-Convictions.

The Commission clarified the meaning of “non-convictions” about which an employer may never inquire to include “certain low level cases, sealed cases or those in which [the applicant/employee] experienced a favorable outcome.”  The Commission also provided multiple examples of non-conviction violations which are off limits for inquiry, including:

• Instances when the police decided not to charge a person following their arrest

• Cases in which the prosecutor declined to prosecute the person following their arrest

• Cases that were adjourned in contemplation of dismissal (unless the order to adjourn in contemplation of dismissal is revoked and the case is restored to the calendar for further prosecution)

• Cases in which all charges were dismissed

• Cases that resulted in an acquittal on all charges

• Cases in which the verdict was set aside or the judgment was vacated by the court and no new trial was ordered, nor is any appeal by the prosecution pending

• Cases in which the person was adjudicated as a youthful offender

• Cases that resolved in a conviction for a violation even if not sealed, including but not limited to:

  • Trespass

  • Disorderly conduct

  • Failing to respond to an appearance ticket

  • Loitering

  • Harassment in the second degree

  • Disorderly behavior

  • Loitering for the purpose of engaging in a prostitution offense

• Cases that resolved in a conviction for a non-criminal offense under the laws of a state other than New York

• Convictions that have been sealed.

2. Update the Criminal History Question Used After a Conditional Offer is Made.  

The Commission updated its form FCA-compliant criminal history question that employers may ask.  It now reads:

Have you ever been convicted of a misdemeanor or felony? Answer “NO” if you received an adjournment in contemplation of dismissal (“ACD”) that has not been revoked and restored to the calendar for further prosecution or if your conviction: (a) was sealed, expunged, or reversed on appeal; (b) was for a violation, infraction, or other petty offense such as “disorderly conduct;” (c) resulted in a youthful offender or juvenile delinquency finding; or (d) if you withdrew your plea after completing a court program and were not convicted of a misdemeanor or felony.

3. Utilize a Two-Stage Process When Running a Background Check. 

Analysis of criminal history should be the last stage of the evaluation process.  To ensure that criminal history really is the last issue employers consider (if they even consider it), the Commission requires that employers utilize a two-stage background check process.  First, the employer should receive and evaluate non-criminal information, such as confirming the applicant’s educational background and employment references.  Only after favorably completing an analysis of one’s non-criminal information may the employer move to the second stage and receive and evaluate criminal history.  The Commission seemed unconcerned about an employer’s ability to engage in this two-stage process as, it noted, most background check providers already have the capabilities to produce segregated reports – one with non-criminal information and one with criminal information.  But the Commission did confirm that it would still expect an employer to create and utilize a two-stage process where the vendor only has the ability to produce one report or where the employer does not utilize a vendor.

4. Tread Carefully Before Taking an Adverse Action Based on Non-Criminal Information Analyzed After Analyzing Criminal Information.  

The Commission is weary of a situation where employers analyze criminal history and then later rescind an offer or take another adverse action based on non-criminal information about which, the employer claims, it subsequently learned.  In that situation, to avoid a violation, the employer would be required to show, as an affirmative defense, that “(1) the employer could not have reasonably known the information before the conditional offer and (2) regardless of the results of the criminal background check, the employer would not have made the offer if it had known the information before the offer was extended.”  The Commission further stated that “[i]nformation could reasonably have been known before a conditional offer if the information existed prior to the conditional offer and could have been obtained by an employer exercising reasonable due diligence.”

Note on Driving Abstracts: The Commission acknowledged the difficulty in separating non-criminal from criminal information in driving abstracts and warned employers against reviewing driving abstracts until after making a conditional offer.  It did, however, note that, after reviewing the abstract, the employer could act on non-criminal information and satisfy the affirmative defense. 

5. Update Background Check Disclosure and Authorization Forms. 

Employers should pay close attention when drafting and distributing background check disclosure and authorization forms provided to an applicant before a conditional offer.  More specifically, the Commission warned against referencing a “background check” or “criminal background check” and recommended using the terms “consumer report” or “investigative consumer report”.  (Note: if the job applicant requests the employer to disclose the scope of the investigative consumer report, however, the employer may state that a criminal background check will be included in that report).

6. Engage With the Applicant or Employee Before Running the Fair Chance Analysis. 

Employers who decide to run the fair chance analysis have an affirmative obligation to gather evidence from the applicant or employee to help run the analysis; for example, by considering evidence: (1) of rehabilitation or good conduct from the candidate; (2) of successful performance of their job duties in past employment; and (3) in the case of convictions, that the applicant has addressed the causes of his or her criminal activity.  Employers should also confirm the “applicant’s date of birth as relevant to consideration of the person’s age when the alleged or convicted crime occurred.”  At the same time, the Commission confirmed that employers may not: (1) “ignore evidence favorable to the applicant”; and (2) “simply engage in a pro forma review” of the factors. 

7. Conduct a Specific Fair Chance Analysis and Share it With the Applicant/Employee if You Want to Withdraw the Offer.  

If the employer wants to withdraw the offer or otherwise take an adverse action, it should make sure to:

• Provide the applicant/employee with a written copy of the any inquiry conducted into their criminal history.  According to the Commission, this means that the employer must disclose a “complete and accurate copy of every piece of information it relied on to determine that an applicant has a criminal record, along with the date and time the employer accessed the information” (emphasis ours).  In short: “The applicant must be able to see and challenge the same criminal history information relied on by the employer.”  If relying only on the background check report, simply provide that to the applicant/employee.  But if relying on information from “other sources”, provide that to them too.  For example, if you searched the internet, you must “print out the pages [you] relied on, and such printouts must identify their source so that the applicant can verify or contest them.”  Further, if you relied on “public records”, provide a copy of those records, and if you relied on “oral information”, provide a “written summary of the portion of [your] conversation that relates to criminal history.”

• Share a written copy of its Fair Chance Analysis.  Here, the Commission made it clear that it expects employers to conduct a specific, individualized analysis.  The analysis cannot utilize “[b]oilerplate denials” or generalities.  For example, an employer “cannot list specific facts but then fail to describe how, based upon those facts, it concluded that the applicant’s record evidenced either a direct relationship to the job or an unreasonable risk to people or property. Rather, the employer must explain how its weighing of all of the factors in the fair chance analysis contributed to its determination to withdraw the conditional offer.”

• Provide at least five business days to respond to the inquiry and analysis.  If the applicant/employee provides the employer with additional information, the employer must not only consider whether it would impact the fair chance analysis, but it must rerun the analysis.  If the employer holds firm in its decision, it must then communicate that decision to the applicant/employee in writing within a reasonable period of time. 

8. Consider Whether to Place an Employee on Temporary Leave While Running the Fair Chance Process. 

An employer may place an employee on a temporary leave while it runs its fair chance analysis, provided the employer permits the employee to use time off consistent with the employer’s regular time off policies.  The employer runs the risk of violating the FCA, however, if it unnecessarily prolongs the fair chance process.  According to the Commission, this means that the process should typically take no longer than 5 days to complete.  More time may be needed, but the employer would need to show that the delay was reasonable under the circumstances. 

9. Provide the Applicant/Employee With An Opportunity to Respond Before Taking an Adverse Action Based on an Intentional Misrepresentation.

While an employer does not have to run a fair chance analysis when it acts based on an intentional misrepresentation, the amended law now requires employers to provide the applicant/employee with a copy of any information that led the employer to believe they misrepresented their criminal record, and then provide them with at least five business days to respond.  Then, if the applicant/employee can “credibly demonstrate” that the information they provided was “not a misrepresentation or that a misrepresentation was unintentional,” the employer would then be required to run a fair chance analysis before taking the adverse action against the applicant/employee. 

10. Follow the Fair Chance Process if You Work with a Temporary Help Firm. 

Employers who engage staffing firms are not relieved of their compliance obligations – they cannot make any statements or inquiries about an applicant’s criminal record until after the staffing firm assigns them to the employer, and only then can they run the fair chance process if they wish to refuse the assignment of the temporary worker. 

Key Takeaways:

• The FCA is far-reaching – now applying (i) not just to applicants, but also to current employees and other individual service providers; and (ii) at the advertising, interviewing, evaluation and retention phases.  Thus, employers should proceed with great caution in building background check processes and procedures and administering the same.  Even before an employer learns about and analyzes any criminal history, compliance landmines abound.  Once employers do receive criminal history information, their compliance obligations do not become any less onerous. 

• Employers should make the receipt and analysis of criminal history the very last step in the decisionmaking process.  They should be prepared to start an applicant’s employment or contactor’s engagement, or effectuate the transfer or promotion of the employee, but for the receipt and review of their criminal history. 

• Employers who want to rescind an offer of employment, transfer or promotion, or take an adverse action against an employee, will have to show very specifically, via a written, individualized analysis, which it shares with the individual, why the individual’s criminal history disqualifies them from employment or the new opportunity. 

• In running that analysis, employers cannot ignore evidence and other information provided by the individual about their criminal history; in fact, they must solicit and consider it when running their fair chance analyses, and then they must do so again after they have shared their initial determination with the applicant/employee.  Employers must also engage with the applicant/employee where they seek to act based on a belief that the applicant/employee has misrepresented their criminal history.