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Applicant denied referral by recruiting agency after discovery of criminal record cannot advance bias claims

By Kathleen Kapusta, J.D.

An applicant who failed to reveal his criminal record to a staffing agency, and who was denied a referral by the agency when a third-party background check revealed criminal convictions, could not advance his disparate treatment or disparate impact claims against the agency, a federal district court in Texas ruled (Manley v National ProSource, Inc, July 10, 2013, Atlas, N). Accordingly, the court granted summary judgment for the agency on his claim that it discriminated against him when it refused to refer him for employment because of his criminal record.

Criminal record. National ProSource, Inc and Matrix Resources, Inc were hired by an employer to find applicants for a temporary job in Houston, Texas. Although Matrix recommended the applicant, the employer decided not to interview or hire him. ProSource then asked the applicant to submit an application and interview with it for a referral to the employer. In his application, he indicated that he had never been convicted of a crime and authorized ProSource to run a criminal background report. ProSource then requested and received a criminal background check from a third-party credit reporting agency, which revealed the applicant had been convicted of driving with an invalid license, assault causing bodily injury, and theft. As a result, ProSource did not refer the applicant to the employer.

He then sued the employer and both staffing companies, contending that they had a pattern and a blanket policy of denying employment opportunities to individuals with criminal records that disparately impacted and adversely affected the minority applicant pools in violation of Title VII and the Fair Credit Reporting Act (FCRA). All three defendants filed motions for summary judgment, which the court granted as to all claims against Matrix and the employer. The court also granted summary judgment to ProSource on the applicant’s claim under the FCRA. At issue here is the applicant’s disparate treatment and disparate impact claims against ProSource.

Disparate treatment. Noting that the applicant alleged that ProSource discriminated against him when it refused to refer him to the employer because of his criminal record, the court pointed out that individuals with criminal histories are not a protected class under Title VII. Here, the applicant did not allege that ProSource failed to refer him because he was black or male per se or that it refused to refer applicants with criminal records only if they were black or male. Instead he claimed that ProSource had a policy of refusing to refer all applicants with criminal records. Despite these contentions, there was evidence showing that ProSouce did in fact refer black individuals and males with criminal records.

In addition, the applicant offered no evidence to show that ProSource’s proffered reason for refusing to refer him—he lied about his criminal record on his application—was pretext or that race, color, or gender was another motivating factor behind its decision. Indeed, there was evidence that ProSource refused to refer for employment two white applicants who lied on their applications. Accordingly, the court granted summary judgment to ProSource on this claim.

Disparate impact. Turning to the applicant’s race and color-based disparate impact claims, the court first examined the proffered opinions of his expert witnesses. One opined that black applicants were half as likely as similarly situated white applicants to be recommended for employment by ProSource. His methodology, however, contained significant flaws or omissions rendering his opinions unreliable. Not only did he not address whether black or male applicants were disproportionally impacted by ProSource’s alleged policy—analyzing instead whether white applicants were generally more likely to be referred—he did not take into account the availability of job openings for which a particular applicant was qualified. Further, he treated applicants with materially different criminal backgrounds as similarly situated, provided no meaningful explanation of how he reached his conclusions, and failed to explain how he addressed applicants whose racial identification was unclear. His opinion was thus inadmissible.

The applicant’s second expert fared no better. His conclusion that black individuals were more likely to have criminal records and less likely to be hired in specified jobs than white individuals with criminal records was not sufficiently relevant to be admissible. Not only did he fail to analyze ProSource’s referral practices, there was no explanation or analysis of the racial makeup or employment success of individuals with criminal records in Houston, Harris County, or Texas as a whole. Moreover, in concluding that black individuals were more likely to be discriminated against among individuals with criminal records, he examined only jobs that required no prior experience or education beyond high school. Here, however, ProSource was referring applicants for positions as information technology professionals, positions that required significant skills.

The court next addressed the 19 applicant files that the plaintiff cited in support of his claim. Of those, two were black and were referred by ProSouce, the race of four was unclear from their files, and four white applicants had no criminal convictions. Significantly, he failed to cite to a single black applicant, other than himself, who had a criminal record and was not referred. In contrast, ProSource cited to a black applicant with a criminal record who was referred and to two while applicants with criminal records who were not referred. Thus, the plaintiff failed to raise a fact issue that ProSource’s alleged policy had a disparate impact on black applicants.

Gender claims. Nor did he raise a fact issue that ProSource’s policy had a disparate impact on male applicants where he offered no statistical evidence that males with criminal records were disproportionately impacted by the challenged policy. To the contrary, ProSource provided evidence showing that 31 of 72 male applicants with criminal records were referred while only 13 of 74 female applicants with criminal records were referred. Thus, this claim also failed.

Causation and damages. ProSource next contended that the applicant could not demonstrate a causal nexus between its policy of disqualifying from referral candidates who falsify information on their application and his alleged damages. Here the court found that even if his evidence was sufficient to support judgment in his favor, he would be entitled only to nominal damages as a plaintiff cannot recover damages under Title VII unless the prohibited employment practice was the cause of the applicant’s rejection. ProSource’s refusal to refer the applicant did not cause him to lose a job opportunity with the employer, the court explained. Rather, his application had previously been referred by Matrix, which did not conduct a criminal history background check. Thus, there was no evidence that the employer knew of his criminal history when it decided not to interview or hire him. Accordingly, a referral by ProSource would have been “an empty act.”