United States: Wisconsin Supreme Court Strengthens Employers Defenses In Some Arrest And Conviction Record Discrimination Cases

The Wisconsin Supreme Court recently released its decision in Cree, Inc. v. Labor and Industry Review Commission, overturning long-established precedent regarding when an applicant with a domestic violence conviction record may be disqualified from the position because the conviction is “substantially related” to it. Wisconsin Stat. § 111.335(3) prohibits discrimination based on an applicant's or employee's arrest or conviction record unless the record is “substantially related” to the underlying position.

The state Labor and Industrial Review Commission's (LIRC) longstanding application of the “substantially related” test to domestic violence crimes hinged on the intimate, household-related nature of such crimes, which LIRC concluded is inherently missing from a workplace setting. Essentially, LIRC's application of the exception assumed that domestic abusers would not engage in the same conduct with co-workers or customers, meaning that crimes of domestic violence almost never related to the underlying job.

Background

In 2013, Derrick Palmer was convicted of eight domestic violence crimes against his girlfriend — two counts of felony strangulation and suffocation, four counts of misdemeanor battery, one count of fourth degree sexual assault, and one count of criminal damage to property. Two years after he was released from prison, he applied for an open Applications Specialist position at Cree, Inc., a 600,000 square-foot facility employing more than 1,000 people. The position required the employee to have access to almost the entire Cree facility, required the employee to sometimes be on location at customers' facilities and to even travel overnight independently to trade shows. The employee was expected to operate largely without supervision.

Cree offered Palmer the Applications Specialist job subject to a standard background check. The background check revealed Palmer's 2013 convictions. Cree referred the matter to its general counsel who reviewed Palmer's conviction record using a matrix that categorized each of Palmer's convictions as a "fail." Cree then rescinded its offer of employment to Palmer.

Palmer filed a discrimination claim with the Wisconsin Department of Workforce Development that after years of litigation ultimately reached LIRC. LIRC applied its longstanding rule that crimes occurring in an exclusively “domestic setting” were not substantially related to the position at Cree and that the employer's decision to rescind its offer was unlawful. 

The Court's New Rule

In reviewing the company's appeal of the matter, the Wisconsin Supreme Court immediately clarified that the plain meaning of “substantially related” requires that the employer show that the facts, events, and conditions surrounding the convicted offense materially relate to the facts, events, and conditions surrounding the job. Essentially, it held, the purpose of the substantial relationship test is to “[a]ssess[] whether the tendencies and inclinations to behave a certain way in a particular context are likely to reappear later in a related context, based on the traits revealed.”

The conflicting appellate history of the case coupled with LIRC's unworkable, de facto exception for domestic violence crimes, highlighted the need to clarify how employers, LIRC, and reviewing courts should apply the substantial relationship test to domestic violence convictions. The Court examined two essential factors in determining whether a crime is “substantially related” to employment:

1. The specific circumstances are in the workplace that could lead to recidivism. Here, the crimes of domestic violence necessitated that the abuser have the opportunity to isolate his victim(s).

When examining the circumstances of the job at Cree that might allow a perpetrator to isolate a victim, Cree's “large, loud, and unsupervised facility provides cover for criminal activity.” Moreover, Palmer would be “largely independent as an Applications Specialist, with no day-to-day supervision” and the independent and interpersonal circumstances of the position and the opportunities created by unsupervised travel created significant opportunities to isolate a victim.

2. The existence of character traits that would indicate willingness to repeat the offense. The court emphasized that certain crimes exhibited the existence of certain undesirable character traits. It reasoned that “crimes of domestic violence, like other violent crimes, indicate a character trait of willingness to use violence against others” and that circumstances threatening a “perpetrator's power and authority” could “trigger a violent response.”

Applying this factor, the Court held that the character traits exhibited by convictions of domestic violence indicate a “willingness to use violence to exert power and control over others,” which substantially relates to the independent and interpersonal nature of a pre- and post-sales job like the Applications Specialist position.

The Court also considered the seriousness of Palmer's convictions (“the more serious the offense, the less we can expect an employer to carry the risk of recidivism”), the recentness of the conviction (about two years) and the existence of an emerging pattern of criminal behavior (Palmer was previously convicted of domestic violence crimes against a different partner).

Key Takeaways

While the Wisconsin Supreme Court's decision in Cree is limited to crimes of domestic violence, it nonetheless should come as welcome relief for employers. First, the decision finally allows Wisconsin employers to consider an applicant's conviction for crimes of domestic violence as potentially disqualifying, which previously carried great risk for successful discrimination claims under the Wisconsin Fair Employment Act. Second, employers can easily apply the practical framework to most workplaces to assess the likelihood of recidivism, given the nature of the position, the physical layout of their facilities, and the violent nature of the underlying offense. In the midst of other hiring woes, Wisconsin employers can now more comprehensively assess the actual risk of an applicant repeating his conduct and threatening the safety of employees, customers, and the public.

For employers throughout the nation, the Cree  case serves as a useful reminder of the many nuanced issues (which can often vary significantly based on state and crime) in evaluating employees' and applicants' criminal background checks.

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