Waterloo Bans the Box - Other Employers Need to Think Outside It

By Ann Kendell

On a final vote November 4, 2019, the Waterloo City Council narrowly passed a city ordinance intended to help people with criminal histories find jobs by reducing the effect of the stigma of an arrest or conviction. The “Fair Chance Initiative” goes into effect on July 1, 2020. These types of measures, commonly called “ban the box” initiatives, seek to require employers to consider a candidate’s qualifications before learning of a criminal past. Waterloo is the first city in Iowa to pass an ordinance of this kind, and will join more than 150 other cities in the country in “banning the box.”

Specifically, the Waterloo ordinance prevents the city and all private employers from having a question about criminal records on job applications, while those employing 15 or more workers are not allowed to ask about criminal records until making a conditional job offer. Employers can still conduct criminal background checks and can rescind job offers for legitimate business reasons.

A violation of the ordinance may subject an employer to a fine payable to the candidate, but the ordinance does not create a private right of action – so the candidate cannot sue the employer for other monetary damages under this law. However, the employer could be subject to other state and federal employment laws that may create liability for failing to hire.

In 2012, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued enforcement guidance regarding the regarding the use of arrest or conviction records in employment decisions. The concern was using arrest or conviction records in employment decisions may have a disparate impact on race and national origin. The EEOC’s guidance referenced a case in the United States Court of Appeals for the Eighth Circuit, Green v. Missouri Pacific Railroad, 523 F.2d 1290 (8th Cir. 1975). The Eighth Circuit is the appellate court for Iowa’s federal courts. In Green, the Eighth Circuit held that it was discriminatory under Title VII for an employer to follow “the policy of disqualifying for employment any applicant with a conviction for any crime other than a minor traffic offense." In a second appeal to the Eighth Circuit, Green v. Missouri Pacific Railroad Company, 549 F.2d 1158 (8th Cir. 1977), the Court upheld the lower court's injunction prohibiting the employer from using an applicant's conviction record as an absolute bar to employment, but allowed the employer to consider a prior criminal record as a factor in making individual hiring decisions, as long as the these three factors were taken into account: 

• The nature and gravity of the offense or conduct;
• The time that has passed since the offense or conduct and/or completion of the sentence; and
• The nature of the job held or sought.

Employers should use the "Green factors" to assess whether considering a prior criminal record to exclude a candidate is job-related for the position in question and consistent with business necessity. Therefore, even if you are not in Waterloo, Iowa, employers should still consider whether any hiring practices have a disparate impact based upon protected characteristics.

• Do advertised lifting requirements match reality or are we unnecessarily screening out women and people with disabilities? 
• Do employees need to have a high school diploma or are we unnecessarily screening out people based upon race and disability status?
• Are your hiring requirements related to the job in question and consistent with business necessity?

If you have questions about hiring practices, please contact Ann Holden Kendell or any of our Employment & Labor Law Practice Group members for more information.

Additional Information

Waterloo City Ordinance

EEOC Guidance - Arrest & Conviction Records