By: Bob Goldberg, RSPA General Counsel
A year does not pass without several calls to the RSPA Legal Hotline regarding embezzlement, fraud or theft involving a reseller’s business. These calls are most troubling for almost always there was a great deal of trust placed in the individual and their crime is most disturbing to the owner. At RetailNOW I shared an email from a member who had been financially taken by a partner of almost forty years. Another reseller was found personally liable for withholding taxes where the checks were prepared but never mailed. The bookkeeper took the funds for her gambling habit rather than mailing them to the IRS. How does a reseller protect itself?
It begins with the Application for Employment. The application is typically the first contact between the employer and prospective employee. The application seeks information regarding the prospect. Using the employment application for all applicants provides consistency and helps avoid claims of discrimination. The information provided allows for the screening of unqualified individuals. If an individual is hired, and it is later determined that there is false information on the application, it can be used to terminate the person.
Recently numerous states, counties, and cities have passed legislation “Banning the Box” that seeks information of criminal convictions on an employment application. The Equal Employment Opportunity Commission issued enforcement guidance on the use of criminal history. The EEOC believes that the use of criminal history may have a disparate impact on minority candidates. Although arrest records should never be used in evaluating a candidate, convictions traditionally could be considered. However the “Box” asking for convictions on an application should be eliminated, but it does not mean you cannot inquire subsequently.
There are benefits in considering criminal histories. The advantages include workplace safety for employees and customers, avoidance of negligent hiring claims, reduction in the risk of theft and dishonesty, and compliance with federal, state, and local laws that require background checks for certain types of jobs. However, the benefits must be weighed with the legal risks.
Conviction records can be considered under appropriate circumstances. Conviction records have always been considered very reliable due to the judicial safeguards associated with trials and guilty pleas. Regardless, the EEOC suggests that criminal convictions not be asked on an employment application. Instead, employers should inquire about criminal history in a later stage of the hiring process. This is consistent with those jurisdictions that prohibit the box inquiring whether one has been convicted of a felony during the past seven years. When inquiring about convictions the offense must be job related. Anyone with job responsibilities involving money, credit, finances, or inventory could certainly be asked if they have ever been convicted of theft, forgery, fraud, or related offenses. Consideration should be given to the time that has lapsed since the conviction. If an individual was convicted of theft as a teenager, that may not be justification for elimination of an applicant in their thirties. Prior employment in a similar position without incident, rehabilitation, education, training, and character references may all become factors in overcoming a past conviction. It appears the best practice for employers these days is to not eliminate a candidate solely based on a past criminal conviction. Consider a total picture and not just the conviction. Nothing prohibits a reseller from hiring the best qualified individual among the applicants.
These changes in the law require that you review your Employment Application and have it updated. Elimination of the conviction box is necessary. Of course, if you are a RSPA member and have any questions feel free to contact the RSPA Legal Hotline.