The Equal Employment Opportunity Commission (EEOC), th agency that enforces federal anti-discrimination laws, shook up employers and the employment defense bar when it issued new “guidelines” on employers’ use of arrests and convictions in making hiring decisions. In short the EEOC decided: “An employer’s neutral policy (e.g., excluding applicants from employment based on certain criminal conduct) may disproportionately impact some individuals protected under Title VII, and may violate the law if not job related and consistent with business necessity (disparate impact liability).” In other words, because African Americans are disproportionately represented among the population of convicts, if an employer decides, for nonracial reasons, he doesn’t want to risk hiring someone with a conviction on his record he can look forward to being sued.

There are multiple problems with the guidelines, some obvious and some not.

Three members of the U.S. Commission on Civil Rights (a separate entity from the EEOC) wrote a letter on May 4 to relevant House committee and subcommittee chairmen responsible for appropriations and oversight of the EEOC (and the Justice Department more generally). It read in part:

As a result of this new guidance, employers will be put in the double-bind of (1) using background checks and risking litigation or even liability for an alleged violation of Title VII or of (2) seriously curtailing or abandoning background checks altogether for fear of violating Title VII and, as a result, risking criminal or inappropriate conduct by employees and negligent hiring lawsuits. They have been put in this position by the EEOC in service to the conventional wisdom that more stringent restrictions on employers’ use of background checks will improve the employment prospects of minority workers, who are disproportionately more likely to have criminal histories than non-minorities, according to the agency.

In particular, the commissioners cited two studies that found that “employers who do not use criminal background checks may be less likely to hire African-Americans because they are using race, age, or other characteristics as proxies for past criminal history. In other words, in the absence of the salutary information that may be provided by a criminal background check, especially where a candidate has a weak employment history, some employers discriminate statistically against black men.”

Now aside from potentially handicapping the applicants it is trying to help, the EEOC has created a minefield for employers. One of the signatories on the May 4 letter, Peter Kirsanow, who is also a practicing labor letter, told me via e-mail: “The new guidance on criminal background checks is an overreach by the EEOC trying to micromanage employers who the agency presumes have bad intentions. Even if well-meaning, its approach will wind up hurting its intended beneficiaries.”

In addition to the unintended impact on African American male job applicants, there are several infirmities with the guidelines.

First, the EEOC assumes the national statistics on African American conviction rates are true in every local job market. In fact, there may be no such disparity in a given community, and the EEOC nevertheless is creating an additional hurdle to job creation, especially for small and less-sophisticated employers struggling to comply. It is a cure in search of a problem in many instances.

Second, the EEOC has no authority to issue binding guidelines on this or any other topic. In the May 4 letter the commissioners observed: “We note that Congress intentionally withheld rulemaking authority from the EEOC when it passed Title VII of the Civil Right Act of 1964.4 The EEOC has nevertheless taken it upon itself to issue ‘guidances’ that effectively substitute for rules—a very troubling practice given Congress’s clear intent that the EEOC refrain from rulemaking. In this case, the guidelines were issued in an especially capricious fashion. According to informed sources, the policy was not made public until after it was voted on, so there was no opportunity for employers to have anything approaching the type of appropriate notice and comment necessary to truly vet the pros and cons of the policy.

Third, the EEOC guidelines would require employers to conduct a case-by-case evaluation of each applicant based on the sort of job at issue, the type of conviction, the time since the conviction and the seriousness of the conviction. If the employer decides after looking at all these factors that he can’t risk hiring the person, the applicant has an open invitation to go to the EEOC or to court to second guess whether the employer was justified in rejecting him.

And finally, the guidelines set up a maze for employers trying to abide by state law, as one expert explains:

The new guidance operates to strip employers of the safe harbor of defending their use of criminal background checks by reference to their need to comply with state and local laws that mandate exclusion of applicants with certain types of convictions from certain types of employment. Under the new guidance, the EEOC takes the position that Title VII will preempt any state and local laws the agency believes “purport[] to require or permit the doing of any act which would be an unlawful employment practice under Title VII.” Thus, if the EEOC finds that an employer’s exclusionary policy or practice is not job related and consistent with business necessity, the employer will face liability for disparate impact discrimination under Title VII. It is not difficult for employers to be caught in the legal crossfire of conflicting mandates from varying levels of government. Under the EEOC’s view of preemption, the agency can indirectly challenge or put pressure on a state or local statutory criminal background check requirement it disagrees with by subjecting the employers subject to compliance with those jurisdictions’ laws to Title VII liability. Over time, the pressure brought to bear by federal litigation in this area will likely crowd out the considered judgments of state and local legislatures regarding workplace, customer and employee safety.

Can a police department enforce a ban on hiring any convicted felon? Doesn’t seem like it. Can a bank impose a flat rule that no one convicted of financial crime can handle cash? Not unless he wants to get sued.

This is par for the Obama Justice Department. Under the guise of preventing “discrimination,” the EEOC exceeds its legal authority, handcuffs employers, disregards legitimate and sane policies aimed at protecting the public and employers, and comes up with a position that is likely to increase the incidence of discrimination.

This is government run amok, brimming with self-righteousness and oblivious to real-world concerns. In fact, that’s an apt description of the entire Obama administration.