By Dave Cohen and Joanna Colosimo
Recently, there have been many questions regarding the collection of demographic data from employees and applicants by employers. Executive Order 14173 and other executive and agency actions by the Trump administration have caused organizations to rethink whether information on race/ethnicity and sex should be collected and, if so, under what circumstances. However, record keeping requirements stemming from Title VII of the Civil Rights Act (Title VII) and the Uniform Guidelines on Employee Selection Procedures (UGESP) to collect demographic information from employees and applicants alike clearly remain, which are further strengthened by precedence in the courts.
One such court case is Equal Employment Opportunity Commission (EEOC) v. Crothall Services Group, Inc (Crothall). In this case, EEOC alleged that Crothall violated § 709(c) of Title VII and an EEOC recordkeeping guideline, 29 C.F.R. § 1607.4(A) by failing to maintain records related to selection procedures, specifically criminal history assessments. Under the EEOC suit, which references Title VII and the prohibition of discrimination based on race, color, religion, sex, or national origin, the Commission argued that the statute requires employers subject to the jurisdiction under § 709(c) of Title VII must make, keep, and preserve records relevant to determining whether unlawful employment practices have been or are being committed.
Specifically, § 709(c) of Title VII states:
“Every employer, employment agency, and labor organization subject to this subchapter shall (1) make and keep such records relevant to the determinations of whether unlawful employment practices have been or are being committed, (2) preserve such records for such periods, and (3) make such reports therefrom as the Commission shall prescribe by regulation or order, after public hearing, as reasonable, necessary, or appropriate for the enforcement of this subchapter or the regulations or order thereunder.”
In the suit, EEOC also outlined obligations stemming from the Uniform Guidelines on Employee Selection Procedures, which states:
“Each user should maintain and have available for inspection records or other information which will disclose the impact which its tests and other selection procedures have upon employment opportunities of persons by identifiable race, sex, or ethnic group as set forth in paragraph B of this section, in order to determine compliance with these guidelines.”
According to the suit, EEOC interpreted the recordkeeping requirement as mandatory.
District Court Legal Memo Says Demographic Data Collection Required
Ultimately, the Court ruled in June of 2016 that EEOC had standing to bring this lawsuit and that § 709(c) and 29 C.F.R. § 1607.4(A) impose mandatory recordkeeping requirements.
After the ruling, EEOC’s then General Counsel, David Lopez said, “Employers should take note that if they choose to rely on a selection procedure such as a criminal background screening, they are required to create and maintain records that allow an assessment of whether the selection procedure has a disparate impact based on race, national origin, or sex. This case clarifies that the recordkeeping rule is not permissive but rather is mandatory and enforceable in a court of law.”
It is important to note that, while the ruling specifically references criminal background checks, it clearly refers to all selection procedures employers may use. As a result, employers may be required to maintain records related to their selection procedures, including demographic data, to ensure compliance with Title VII and EEOC regulations. These records must disclose the impact of selection procedures on employment opportunities for different demographic groups.
Finally, as stated above, §709(c) of Title VII requires the making and maintaining records relevant to the determinations of whether unlawful employment practices have been or are being committed. This begs an important question: How can an employer comply with this requirement of Title VII without the collection and analysis of workforce data?
As always, employers should consult with legal counsel to determine compliance with Title VII and other employment related issues.
Additional Thoughts
The Civil Rights Act of 1991 amended the Civil Rights Act of 1964 and codified the disparate impact theory of discrimination into law. This amendment established important guidelines for employers to determine if employment practices are unlawful. Specifically, under Section 709(c), Title VII mandates that all employers, employment agencies, and labor organizations must maintain records relevant to determining whether unlawful employment practices have occurred or are occurring. Consequently, the district court ruling, combined with this stated legal requirement, underscores the necessity for employers to collect demographic data on applicants, and also ensures that their employment decisions are not unlawful. These practices are not only lawful but essential in ensuring compliance with anti-discrimination laws. It is imperative for employers to understand that collecting such data is integral to adhering to both historical positions of the Equal Employment Opportunity Commission and a judicial interpretation, as well as ensuring fair and equitable hiring practices.
In the wake of the revocation of Executive Order 11246 for federal contractors, employers should take note of the entire legal landscape when making decisions regarding collection and recordkeeping of demographic information of applicants, hires, and their workforce.
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