On December 20, 2019, the president signed legislation, the National Defense Authorization Act (NDAA) for Fiscal Year 2020, which includes the federal Fair Chance Act ("the Act"). The Act prohibits federal contractors that have openings for positions within the scope of federal contracts, as well as all federal agencies, from inquiring about or seeking criminal history information from an applicant until after a conditional job offer has been extended. The Act and multi-jurisdictional state and local "ban-the-box" laws are intended to give ex-offenders released from prison and those with past criminal convictions a better opportunity at obtaining employment by eliminating or at least deferring any pre-employment inquiry into an applicant's criminal history.

There are important exceptions to this prohibition, notably positions related to law enforcement and national security duties, positions requiring access to classified information, and positions that, by law, require a federal contractor or the federal government to obtain criminal history information before extending a conditional job offer.

The Director of the Office of Personnel Management will promulgate regulations that identify additional excluded job positions, which may include "positions that involve interaction with minors, access to sensitive information or managing financial transactions." The implementing regulations are to be compliant with federal civil rights laws, such as Title VII of the Civil Rights Act of 1964.¹

The Act permits applicants to submit a complaint, "or any other information," relating to a federal contractor's or federal agency employee's compliance with the law. Complaint procedures will be established and published.

The Act provides important incentives for federal contractors and employees of federal agencies to avoid violating the Act. For example, if a federal contractor is determined to have committed an initial violation of the Act, it will first receive a notice and warning of violation; subsequent violations can result in the suspension of payments owed under the pertinent government contract. Similarly, if it is determined that an employee of a federal agency, after notice and an opportunity for a hearing on the record, has committed an initial violation of the Act, the federal employee will be issued a written warning that is filed in the employee's official personnel record file; subsequent violations can lead to suspensions and civil penalties.

The overall topic of compliance with the wide-ranging ban-the-box laws remains an important issue for employers in all industries. Prudent employers will continue to be mindful of how this is an evolving, rather than static, area of the law. Employers should also continue to be mindful of related compliance issues under Title VII and the fair credit reporting laws.

Posted: January 13, 2022

¹ Earlier this year, the U.S. Court of Appeals for the Fifth Circuit affirmed a trial court ruling from Texas that invalidated the EEOC's 2012 guidance on conviction and arrest records. See Rod M. Fliegel and Molly Shah, Fifth Circuit Deals a Blow to EEOC's Criminal Record Guidance, Littler ASAP (Aug. 6, 2019).