New York City’s “Ban the Box” Law May Also Cover Investigations

Late last week, the New York City Commission on Human Rights issued its Fair Chance Act guidance document.The guidance provides additional direction to employers in New York City regarding their obligations under the City’s Fair Chance Act, which took effect last week. The Fair Chance Act generally prohibits employers from asking about an applicant’s criminal history until after the employer extends a conditional offer of employment. In addition, employers must consider a set of eight specific factors before rejecting an applicant based on the applicant’s criminal history, and employers must also provide the applicant with a written analysis of the decision, along with three business days to respond.

Many aspects of the Fair Chance Act are not terribly controversial. Other jurisdictions have similar “Ban the Box” legislation prohibiting employers from asking job applicants about criminal histories until after a conditional offer of employment has been made. Guidance from the EEOC also advises employers to consider numerous factors when deciding whether to hire an applicant with a criminal history. What sets the Fair Chance Act apart is that New York City is the only jurisdiction that requires an employer to provide a written analysis of its decision making process to the applicant. In other jurisdictions, employers would simply need to comply with the notice requirements of Fair Credit Reporting Act.

The Commission’s guidance raises an even greater concern for New York City employers. As expected, the Commission confirmed that it does not distinguish between current employees and job applicants when enforcing the Fair Chance Act. The Fair Chance Act applies to “all decisions that affect the terms and conditions of employment, including hiring, termination, transfers, and promotion…” Thus, a New York City employer may not ask a current employee whether the employee has a criminal history or currently pending criminal matters, unless the employer first extends a conditional offer of employment to the employee.

New York City employers should be concerned that the broadly written prohibitions contained in the Commission’s guidance could lead to perverse results. While job applicants may interact with employers only once, during the application process, employers have considerably more substantial relationships with current employees. Employers may have a duty to respond when an employee is suspected of having engaged in criminal misconduct. The Commission’s guidance indicates an employer’s investigation of an employee’s possible criminal misconduct would trigger Fair Chance Act requirements.Moreover, the broad language of the guidance suggests that it could apply even employees in the process of applying for other positions within a company.

For example, an employer subject to the federal Drug-Free Workplace Act may require employees to disclose drug-related arrests. Presumably, such a policy remains lawful under the Fair Chance Act. On the other hand, the employer may violate the Fair Chance Act by looking into whether an employee complied with the company’s Drug-Free Workplace policy, as the employer cannot ask the employee whether he or she had been arrested. Similarly, the guidance indicates that an employer may violate the Fair Chance Act by suspending a driver for having been arrested for driving under the influence, unless the employer first complies with the requirements under the Fair Chance Act. Indeed, any time an employer attempts to investigate whether a current employee engaged in criminal misconduct, the Commission’s guidance suggests that the employer would first need to extend a “conditional offer of employment” to an employee and comply with each of the steps that follow.

In theory, the employer’s disciplinary process in the face of possible criminal misconduct on the part of an employee should be construed to fall within the definition of a “conditional offer of employment.” Nevertheless, it is counter-intuitive for requirements governing the job application process to also apply to work-related investigations of criminal misconduct.For these reasons, New York City employers will need to carefully consider how to go about responding to allegations that an employee may have engaged in criminal misconduct.