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On December 17, 2019, the Fair Chance to Compete for Jobs Act of 2019 (the “Fair Chance Act”) was signed by the President as an amendment to the National Defense Authorization Act.  This federal “ban-the-box” law proscribes federal agencies and contractors from asking about a job applicant’s criminal history until after they make a conditional offer of employment.  For federal contractors, the law only extends to positions related to a federal contract.  The Fair Chance Act will go into effect on December 17, 2021.  The Office of Personnel Management and General Services Administration will issue implementing regulations before the law goes into effect.

Federal contractors will be subject to a sliding scale of sanctions and liability for violations of the law.  A first violation will result in a written warning after a 30-day period in which the alleged violator may appeal a notice of violation.  For subsequent violations, an executive branch agency may take action against the contractor, considering the severity of the infraction and the contractor’s history of violations.  Possible adverse actions may include:  (1) written notice that eligibility for contracts requires compliance; (2) requiring the federal contractor to respond within 30 days stating that it affirms that it is taking steps to comply with the law; and, (3) suspension of payment under the federal contractor’s contract until it demonstrates that it is complying with the law.

Three dozen states and several local jurisdictions have passed similar legislation over the past decade to limit the use of criminal arrest and conviction history in employment decisions.  However, recent research suggests that these laws do not work as intended, and in some circumstances reduce employment opportunities for individuals with criminal histories.  See, e.g., Doleac, Jennifer L, “Empirical evidence on the effects of Ban the Box policies:  The state of the literature in 2019,” Testimony prepared for the U.S. Committee on Oversight and Government Reform (March 11, 2019); Rose, Evan K., “Does Banning the Box Help Ex-Offenders Get Jobs?  Evaluating the Effects of a Prominent Example,” Journal of Labor Economics (December 20, 2019); Agan, Amanda and Sonja Starr, “Ban the Box, Criminal Records, and Racial Discrimination: A Field Experiment,” Quarterly Journal of Economics, 133 (February 2018); Sherrard, Ryan, “Ban the Box’ Policies and Criminal Recidivism” (January 6, 2020).

In testimony before the U.S. House Committee on Oversight and Government Reform, Jennifer Doleac, an economics professor at Texas A&M who is affiliated with the University of Chicago Crime Laboratory, stated that “[c]urrent evidence suggests that Ban the Box may not increase employment for people with criminal records, and might even reduce it . . . Delaying information about job applicants’ criminal histories leads employers to statistically discriminate against groups that are more likely to have a recent conviction.”  University of California, Santa Barbara economist Ryan Sherrard confirmed these negative consequences, finding that after a jurisdiction passes a  “ban the box” law, African American men get fewer job callbacks, and white applicants get more.

These studies, and others, conclude that when employers are unable to find out about an applicant’s criminal history earlier in the hiring process, they assume the worst about African-American and other minority job candidates.  Hiring managers may decide to avoid the hassle of potentially complying with ban the box laws by simply not considering these candidates.  Therefore, these laws work to the disadvantage of individuals the law was designed to protect.  Mr. Sherrard goes further and opines that increases in criminal recidivism may stem from the discouragement that an ex-offender feels when he or she gets an interview, only to be rejected because of his or her past crimes.  Ms. Doleac suggests that jurisdictions should look at alternatives to ban the box laws to make it easier for individuals with criminal histories to get jobs.  Her recommendations include investing in education and training to improve their skills, and authorizing judges to issue certificates of work readiness and giving employers legal protection if employees with criminal histories commit crimes on the job.

There has been a significant amount of momentum in state legislatures and local councils to pass ban the box laws.  It is unclear at this point whether the growing research on the unintended consequences of these laws will cause lawmakers to take a different approach to encouraging the employment of ex-offenders.  We will continue to monitor any developments on these issues.