By: Lía Fiol-Matta, Esq. and Ty Hyderally, Esq.

In this day and age in which the controversial issue of systemic racism is widely discussed and analyzed, a decision announced a few days ago by a federal appeals court will likely be a matter of much debate. In a 2-1 decision on September 21, 2020, the Second Circuit Court of Appeals, based in New York, affirmed the dismissal of a lawsuit claiming that a company’s refusal to hire individuals with criminal felony convictions has a discriminatory impact on applicants who are Black because they are arrested and incarcerated at rates higher than Caucasians relative to their share of the national population.

In 2017, George Mandala (“Mandala”) and Charles Barnett (“Barnett”), both African American, were offered jobs with NTT Data, Inc. (“NTT”), a global information technology services provider. After they each received job offers, NTT withdrew the offers of employment upon discovering, pursuant to routine background checks, that Mandala and Barnett had felony convictions. NTT justified their decisions by merely stating that it had a policy of not hiring individuals with felonies on their records.

Mandala and Barnett sued NTT on the basis that the company’s hiring practices violated Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, which prevents employers from discriminating against employees or job applicants based on race, color, religion, sex, or national origin, as well as several New York antidiscrimination laws. Mandala and Barnett argued that national statistics, which they used as evidence to support their claims, show that African Americans are arrested and incarcerated more than Caucasians in the national population. They further argued that employers tend to put more weight on criminal history for African American candidates as opposed to Caucasian candidates.

The lower federal district court granted NTT’s motion to dismiss the complaint in 2019 for failure to state a claim, holding that the statistics failed to show a relationship between the pool of NTT applicants who are Caucasian versus African American and their respective rates of felony convictions. The court also declined to exercise supplemental jurisdiction over the state law claims.

In Mandala v. NTT Data, Inc., No. 19-2308 (2d Cir. 2020), U.S. App. LEXIS 29985, the split Second Circuit Appeals panel, comprised of two President Trump appointees in the majority and a dissenting President Clinton appointee, affirmed the dismissal of Mandala and Barnett’s lawsuit, holding that no evidence existed that the national incarceration statistics represented the job applicant pool at NTT. “In fact, because the complaint indicates that the positions that plaintiffs applied for require certain educational and technical credentials, there is good reason to think that these national statistics are not representative of the qualified applicant pool,” the appeals court said in an opinion by Judge Richard J. Sullivan. He continued stating that it is a mistake to presume that population-level statistics describe with accuracy subgroups of the population, adding: “A simple example of this pitfall would be to apply national height averages to certain subgroups of the population, say NBA players or horse-racing jockeys.” Judge William J. Nardini joined the opinion.

Judge Denny Chin dissented, opining that the District Court’s dismissal of the complaint should be vacated because it held the plaintiffs to a higher standard for a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Chin posited that Mandala and Barnett’s reliance on national data was proper and the District Court’s conclusion otherwise was “premature.”  The judge added that those statistics “are a logical starting point for a disparate impact analysis, as plaintiffs are alleging a national impact.” Judge Chin noted that neither Mandala nor Barnett was given the opportunity to explain their convictions, rehabilitation or post-conviction conduct.

If you are concerned about the effect of a criminal background check on your current employment or employment prospects, know that the main law that governs criminal background checks is the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”), which applies to both credit reports and criminal background reports. If an employer fires or demotes an employee, or refuses to hire a job applicant, based on the information contained in a background report, the employer must first inform the employee or applicant that a background check will be conducted and must provide the individual with a copy of the report along with a notice of the individual’s rights under the FCRA.

If you have questions on your rights under the FCRA or if you are concerned about racial discrimination in the workplace, you may contact our office.

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