CRD Initiates First-of-its-kind Lawsuit Against Ralphs Over Alleged Criminal History Screening Violations

California employers take heed; the California Civil Rights Department (CRD) is serious about enforcing the state's Fair Chance Act (the Act). In a first-of-its-kind lawsuit, the CRD is alleging Ralphs Grocery Company has violated the Fair Chance Act, resulting in the unlawful denial of employment opportunities to hundreds of applicants at grocery store locations across Southern California.

Specifically, the lawsuit alleges that Ralphs has ignored and continues to ignore the law's requirements, including its practice of screening out otherwise qualified applicants on the basis of criminal histories that do not have any adverse relationship with the duties of the job for which they were applying. The suit seeks monetary damages for impacted individuals and a court order requiring Ralphs to bring its practices into compliance with the Act.

Established to reduce barriers to employment and support community reintegration for people who have been previously involved in the criminal legal system, employers with five or more employees are prohibited from conducting any criminal background history check until after a conditional offer of employment has been made. Once made, the employer must conduct an individualized assessment before making any decisions regarding revocation of the conditional offer.

Effective October 1, 2023, regulatory amendments mandate that the Act's individualized assessment be a "reasoned, evidence-based determination" focused on a factual analysis of several specific factors: 1) Nature and gravity of the offense or conduct; 2) Amount of time since the offense or conduct; and 3) Nature of the job held or sought.

Regulatory modifications also make clear that before denying a job opportunity based on the individual's criminal history, an employer must first determine whether a direct and adverse relationship between the conviction and the specific duties of the job justify denial. This seems to be a particular focus of the Ralphs litigation; the alleged screening out of otherwise qualified applicants on the basis of criminal histories that do not have any adverse relationship with the duties of the job for which they were applying.

To remain compliant - with not only the letter but the spirit of the Act - employers should consider the following:

• Training for all personnel involved in the hiring process.
• Conducting the individualized assessment does not prevent an employer from having validly established pre-job qualifications.
• Consider allowing additional time beyond the requisite response periods for the individual to provide rebutting evidence. This should be given special consideration as the newly modified regulations require an employer - upon timely written notice - to provide individuals "no fewer than five additional business days to respond." Keeping in mind that policies and procedures for giving individuals more time to provide evidence should be the same for all.
• Consider performing a self-audit to evaluate in advance what types of convictions would prohibit an employee from performing a specific job (e.g., a conviction for financial fraud or embezzlement would prohibit an applicant or employee from performing job duties involving the handing of cash or company bank accounts.) Making these decisions in advance prevents making case-by-case determinations for obvious types of convictions; evidencing prior consideration as opposed to consideration based on an individual's alleged protected classification.