Legal Blog

Labor and Employment Telebriefs: Fair Labor Standards Act and “Black Swan”

To listen to the Telebrief click on the play arrow.

By Howard K. Kurman, Esquire An Edited Transcript.



  • EEOC VS. BMW and Dollar General Corp – re: Use of criminal background checks;  “green factors”
  • Case in Southern District of NY Federal Court against Black Swan executives – Employees or unpaid interns?
  • Equal Employment Opportunity Commission v. Houston Funding Ltd.- woman terminated because of desire to express breast milk when return from leave.

Howard Kurman:

  • EEOC suits against BMW and Dollar General Corporation – Use of background checks to screen out job applicants or fire employees


The issue Use of criminal background checks to screen applicants or to fire incumbent employees who didn’t pass those background checks.

What happened

In August of 2012, the EEOC put out what they called “a guidance” on the use of criminal background checks.  For a long time the EEOC’s position on the use of criminal background checks was that they didn’t want employers to inquire about arrest records because the thought was it would adversely impact on African-Americans and Hispanics, those segments of the population that according to the EEOC are disparately affected by arrest as opposed to non-protected employees; however, the EEOC did not take an adverse position on those employers who asked for conviction records or conviction information, and, of course, under the Fair Credit Reporting Act you’re certainly free to ask for criminal background information going back seven years.

The judgment

Distilling it down, what the EEOC said in the guidance was that it did not want employers to be willy-nilly using criminal backgrounds to screen out, in a disproportionately heavy way, minorities and Hispanics.  In order to pass muster, employers were going to need to engage in what was called an individualistic assessment of a particular situation, so that if an employee or an applicant for employment disclosed a conviction or if it were determined that an employee had a conviction in his background, they wanted employers to use what they called the “green” factors Green Factors (3)- from EEOC Guidance (August 2012)

  • One – The nature and the context or the extent of the alleged crime. 
  • Two – Lapse in time between the time of conviction and the time of application
  • Three – The job for which the applicant was being considered.

By the way, anybody who would like to can  download that guidance from the EEOC’s website or get in touch with me, and I can send it to you.  On Tuesday the EEOC filed lawsuits separately against BMW and Dollar General Corporation relating to the use by both of those companies of criminal background checks to screen out job applicants or fire employees.  And, in both of those cases, the EEOC has taken the position that the practice discriminates against African-Americans who have higher statistically arrest and conviction rates than whites.  These notably are the first lawsuits that the agency has filed since issuing that guidance in August of 2012, and they are really a shot across the bow of all employers who use criminal background checks for applicants or even for incumbent employers.


BMW Case

What happened?

BMW had a plant in Spartanburg, South Carolina.  They had a contractor there, and they changed contractors, and when they changed contractors, they did criminal background checks within the last seven years in accordance with the Fair Credit Reporting Act.  Of the 88 employees that they eventually fired because of criminal background, 70 happened to be black.  Some had worked for BMW, according to the lawsuit, for the contractor for more than a decade, and the commission claimed in its lawsuit that BMW’s policy was a blanket exclusion without any consideration or regard for the nature and gravity of the crimes, how old they were or how relevant they were to the type of the work being performed.  In other words, the EEOC cited the so called green factors in stating that BMW violated the so called guidance put out in 2012.


Dollar General Case

What happened?

Similar allegations were made in the Dollar General case. But, the question becomes for you all… What does this tell us in terms of our use of criminal background checks?  Should you, in fact, continue to use them, or should you not? My opinion is you should continue to use them, but you should continue to use them with some degree of caution.

The most prudent thing that you can do is if you are in a situation where you get information regarding a conviction of a prospective employee or even an incumbent employee that you engage in what the EEOC would call an individualistic assessment of whether or not according to these green factors, these three factors that I mentioned, that the applicant is still worthy of being considered for employment.  That will not necessarily insulate you from liability with the EEOC, but I do think that employers are faced with a Hobson’s choice in many cases because if you don’t engage in this degree of due diligence and you hire somebody with a criminal background and that person goes out and injures a third party in the public or even another employee, then the question is, has the employer failed in its duty of due diligence and can be guilty of negligent hiring.  The EEOC in fact basically said in its guidance that they don’t really care what other state laws say or even some industry-specific requirements. For instance, if you’re serving the disabled community, and I know, you know, you’re under an obligation and under a statutory duty to do background checks.  The EEOC apparently does not care about that.  But, what I’m telling you is I believe that if you engage in individualistic assessments, you should be, for the most part, okay in continuing to use these criminal background checks.  And, so, I would not forgo them.  I would not put yourself or your company in a position where you don’t ask about them anymore.  But, you’ve got to make sure that if in fact you’re disqualifying a person because of a criminal background that you engage in this individualistic assessment, which is described by the EEOC. But, you’re going to have to watch your statistics, and you’re going to certainly have to be involved in individualistic assessments.  And, sometimes those individual assessments even involve you getting permission from the applicant to have the attorney that handled the criminal matter speak to the company’s attorney to undergo an investigation of the underlying facts, which supported the criminal conviction.  Because many times there are mitigating factors or extenuating circumstances surrounding the particular conviction that may bear on your decision whether to consider the particular person for employment or not.

So, again, these lawsuits are two days old.  I view them as very significant, and I view it frankly like a good thing that the EEOC picked on big companies because it wouldn’t surprise me at all that these cases travel through the pipeline of litigation, maybe even all the way up to the Supreme Court, and I’m not sure with the composition of the Supreme Court that the EEOC’s so-called guidance would get the same amount of deferral or deference that the EEOC would like.


Case in Southern District of NY Federal Court against Black Swan executives  

The issue

Under FLSA – Unpaid Interns or employees? A  case had been filed in the Southern District of New York Federal Court over whether or not some individuals who were working on a movie in New York were in fact employees or whether they were legitimately unpaid interns.

The Judgment

The court determined that these unpaid interns who were doing work on the movie “Black Swan,” were in fact employees under the Fair Labor Standards Act. What the court stated was that the Department of Labor fact sheet was the relevant document and goes over six discernible and six individualistic criteria to ascertain whether an individual is typically viewed as an employee or as an unpaid or legitimate trainee under the Fair Labor Standards Act.

The six factors that the DOL looks at in determining whether or not somebody is an intern or employee.

  • One is that the internship even though it includes actual operation of the facilities of the employer is similar to training, which would be given in an educational environment.
  • Secondly, the internship experience is for the benefit of the intern.
  • Three, the intern does not displace regular employees but works under close supervision of existing staff.
  • Four, the employer that provides the training derives no immediate advantage from the activities of the intern, and, on occasion, its operations may actually be impeded.
  • Five, the intern is not necessarily entitled to a job at the conclusion of the internship.
  • And, six, the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.


Equal Employment Opportunity Commission v. Houston Funding Ltd.-woman terminated because of desire to express breast milk when return form leave.

What happened?

A  woman was allegedly terminated because of her express desire to express breast milk when she came back from a leave of absence. In this case the plaintiff, Donnicia Venters, went out on a pregnancy leave with this Houston Funding Company.  They weren’t big enough to have an FMLA policy, and so she went out in December of 2008.  And, during the time that she was on leave and she was getting ready to come back, which would have been in February 2009, she had these conversations with her supervisor in which she asked the supervisor whether or not she would be able to have a place in order to express her milk when she came back to work.  And, the supervisor said, “Absolutely not, maybe you need to stay home longer,”  which seems to me to be a pretty stupid response.  And, so, what happened she calls and says she has been medically returned to work, mentioned that she was lactating and asked whether she could use a backroom to express her milk. After asking this question, she testified that there was a long pause, and her supervisor finally responded and said that they had filled her particular position.  And, then, the company sent her a letter of termination, which of course precipitated her filing an EEOC charge predicated upon her sex including her pregnancy, childbirth, or related medical condition.

The issue

What the court basically was focusing on was whether under Title 7 and under the pregnancy amendments to Title 7 that she was discharged in violation of the sex discrimination provisions of the Pregnancy Act.

The judgment

The Fifth Circuit said this is clearly an illegal act. The court said that lactating is a related medical condition of pregnancy for purposes of the Pregnancy Act and taking adverse action against an employee because of that would be illegal.

The interesting part

Now, the interesting part of this case is that the court went on to say that had the employee come back to work and asked for an accommodation in order to express her milk and been refused, she really wouldn’t have had any kind of retaliation or discrimination action against the company under the ADA, the Americans with Disability Act, because pregnancy is not a recognized disability nor would any condition associated be recognized as a disability, and there are published cases where courts have basically stated that employers are under no obligation because of the ADA or any other statute to accommodate a female who is expressing milk.  But, in this case, what happened was the employer, I believe, stupidly made a mistake in firing the employee because she merely expressed the desire to express her milk at work.  All of which is to say, seems to me though, that from an employee relation standpoint companies that are the least bit forward-thinking certainly would probably accommodate a female employee unless it would just be impossible to do so because of either space restrictions or some other really legitimate business reason.  Otherwise, it does not make a lot of sense from an employee relation standpoint to refuse that accommodation.  But, I would let you know that we do have this Fifth Circuit opinion out here, which differentiates between the theory of terminating somebody or taking adverse action against somebody because they express a desire to do so and the distinction of not accommodating a female employee who may want to express milk while at work.  But, again, as a matter of employee relations, I think it makes every good sense to provide for that accommodation, certainly when possible.  So, those are the developments of the day.  You know, I think that the biggest thing to me frankly is the criminal background check and the statement by the Equal Employment Opportunity Commission.


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