Expunction Junction, What’s Your Function: Labor and Industry Review Commission Determines that “Substantial Relationship” Defense Cannot Be Based Upon Expunged Convictions

By Attorney Bryan T. Symes – Weld Riley, S.C.

Recently, the State of Wisconsin Labor and Industry Review Commission (“LIRC”) provided the employer community with an educational nugget concerning how to best, proactively analyze potential conviction-record discrimination scenarios in connection with applicants and current employees.    More specifically, through its opinion in Staten v. Holton Manor, a copy of which is available here: http://lirc.wisconsin.gov/erdecsns/1533.htm, LIRC determined that the oft-cited “substantial relationship” defense is unavailable when an employer predicates an employment-related decision on an applicant’s/employee’s expunged conviction record.

Under Wisconsin law, employers are generally prohibited from taking adverse employment actions against applicants and current employees in connection with “conviction records.”  “Conviction record” is defined broadly, as follows:

[I]nformation indicating that an individual has been convicted of any felony, misdemeanor or other offense, has been adjudicated delinquent, has been less than honorably discharged, or has been placed on probation, fined, imprisoned, placed on extended supervision or paroled pursuant to any law enforcement or military authority.

However, under Wisconsin law, “…it is not employment discrimination because of conviction record to refuse to employ…or terminate from employment…any individual who…[h]as been convicted of any felony, misdemeanor or other offense the circumstances of which substantially relate to the circumstances of the particular job…”   In other words—without getting too far into the legal minutiae—think of an applicant for a bank teller position who previously was convicted of embezzlement.   This example, under the right circumstances, meets the “substantial relationship” test and is a defense to the general prohibition against conviction-record discrimination—meaning the bank employer could likely deny employment.    Okay, against this backdrop, let’s dive into the substance of the Holton Manor decision and explore why the decision is important.

In Holton Manor, the employer, skilled nursing facility, rejected an applicant for a CNA position after initially offering her a conditional offer of employment—because of two conviction records.   For purposes of this blog post, only the expunged conviction record matters.   To that end, the applicant had previously [approximately 10 years earlier, in fact] been convicted of misdemeanor disorderly conduct, which she openly disclosed in response to pre-employment background check question.    The applicant ultimately furnished proof that the misdemeanor was expunged, and received a conditional offer of employment.   Holton Manor ultimately rejected the applicant, and told her specifically that it rejected her candidacy in response to her conviction record [let’s save this decision for another day].

Significantly, in Holton Manor, LIRC agreed with the applicant, “…that an expunged offense may not be used as a reason to deny her future employment opportunities.”  According to LIRC, “[t]he Wisconsin expunction statute permits individuals who commit criminal offenses before age twenty-five to request expunction…[t]he statute contemplates that, once an offense has been expunged, all references to the defendant’s name and identity will be obliterated from the record.”   According to LIRC, “[t]he benefit of expungement allows certain offenders to wipe the slate clean of their offenses and to present themselves to the world—including future employers—unmarked by past wrongdoing.”  So…based on Wisconsin public policy, LIRC determined, “[g]iven all the circumstances, the commission concludes that the affirmative defense of substantial relationship may not be based upon an offense that has been expunged from the complainant’s record.”

The significance of the Holton Manor decision is clear—and employers are now on notice that they will be required to exercise a heightened level of caution in connection with conviction-record status.  “Best practices” dictate that employers will immediately engage in a dialogue with their trusted background-check providers to ensure that expunged conviction records do not inadvertently slip through the cracks.    Employers that routinely consider conviction-record status in connection with employment-related decisions will need to exercise an increased level diligence to ensure that decision-makers are informed about the new legal landscape.   In light of the Holton Manor decision, employers are also strongly encouraged to dust off pre-employment application and background-check forms, to ensure that appropriate disclaimers are added.

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