Fifth Circuit rules against EEOC enforcement guidance

By Lillian Hartgrove, State Board of Education Chairman
Special to the UCBJ

On Aug. 6, 2019, the U.S. Court of Appeals for the Fifth Circuit, in State of Texas v. Equal Employment Opportunity Commission, ruled that the EEOC had overstepped its limited rulemaking and enforcement power when it issued its 2012 Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964. 

The Enforcement Guidance takes the position that criminal screening policies disproportionately impact groups protected under Title VII, such as Hispanic and African Americans, who tend to have arrest and incarceration rates disproportionately higher than other non-protected groups. Thus, the Enforcement Guidance requires that an employer must be able to show that the use of criminal screening policies is job related and consistent with business necessity or be subject to liability under Title VII. In order to do this the employer needs to show that the challenged policy operates to effectively link specific criminal conduct, and its dangers, with the risks inherent on the duties of a party’s position. The Enforcement Guidance says blanket exclusions, such as the use of no-felony rules, do not pass muster because they do not focus on dangers of applicant’s crimes in relation to position in question. 

Texas state law, along with the policies of many state agencies, excludes the hiring of those convicted of specified crimes and in some cases all felonies. Based upon these policies, a former Texas state job applicant filed a complaint with the EEOC, based upon a no-felon hiring policy. The state of Texas thus filed suit against the EEOC and Attorney General in the U.S. District Court for the Northern District of Texas. The state of Texas argued that the Enforcement Guidance was an overstep of the EEOC’s authority because the agency was not authorized to promulgate substantive rules to implement Title VII and the Enforcement Guidance was an impermissible substantive rule. 

The district court held that the Enforcement Guidance was a substantive rule which was issued without the opportunity for notice and comment, and therefore enjoined the EEOC and Attorney General from enforcing the Enforcement Guidance against the state of Texas until the EEOC complied with the Administrative Procedure Act’s notice and comment requirements to promulgate an enforceable substantive rule. This ruling, on it’s face, allowed for future enforcement of the Enforcement Guidance once the EEOC complied with the notice and comment requirement. 

Both parties appealed the district court’s ruling. On appeal, the Fifth Circuit agreed that the Enforcement Guidance is a substantive rule subject to the Administrative Procedure Act’s notice and comment requirement and that the EEOC thus overstepped its statutory authority in issuing the Enforcement Guidance. The Fifth Circuit further held that the EEOC lacked power to promulgate the Enforcement Guidance to begin with, and the Enforcement Guidance would have been invalid even if the EEOC had complied with the Administrative Procedure Act’s notice and comment requirements. Thus, the Fifth Circuit upheld the district court’s injunction and further expanded it to prohibit the EEOC or Attorney General from enforcing the Enforcement Guidance against Texas or treating the Enforcement Guidance as binding in any respect. 

This specific injunction applies only to the Fifth Circuit (Texas, Louisiana, and Mississippi), however it provides a solid basis for other employers to challenge the Enforcement Guidance in other jurisdictions. Whether other courts will adopt these findings is yet to be determined. 

This case, and the ones to come, raise the question of whether rigid adherence to the EEOC’s Enforcement Guidance will soon be a thing of the past. 

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