The U.S. Court of Appeals for the Fifth Circuit dealt the EEOC a major blow in regards to their 2012 “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment under Title VII,” otherwise known as their criminal background check guidance.

On June 27, 2016, the court remanded back to the district court the case that was dismissed in 2014. In that case, the state of Texas argued that the EEOC guidance conflicts with Texas law prohibiting hiring felons for certain jobs. On August 20, 2014 Judge Sam R. Cummings (U.S. District Court for Northern District of Texas) dismissed the case under Federal Rule 12(b)(1), ruling that Texas “lacked standing to maintain its suit because no enforcement action has been taken against it pursuant to the Guidance.” The state of Texas decided to appeal to the Fifth Circuit Court in November, 2014.

The biggest “game changer” was when the Fifth Circuit court found that the state of Texas had “standing challenge” on the guidance because:

  • An actual or imminent injury that is particularized and concrete
  • Fairly traceable to the defendant’s conduct, and addressable by a judgement in [Texas’] favor

This decision means that the EEOC will be required to substantiate its legal basis for the Enforcement Guidance on criminal background checks. If rejected by the federal courts, the EEOC would need to seek further legislation or regulatory authority to broadly prohibit employers from implementing automatic criminal background check disqualification.