Federal Appeals Court Backs Federally Regulated Employer in Suit Alleging Auto-Exclusion Criminal Record Policy Violated Title VII

The Eighth Circuit rejected an appeal from a putative class of minority workers who alleged that a federally regulated bank violated Title VII of the Civil Rights Act when it failed to sponsor waivers to overcome a federal law that bars certain former criminals from working for FDIC-backed banks.

The federal law at issue, Federal Deposit Insurance Act, bars "any person who has been convicted of any criminal offense involving dishonesty or a breach of trust" from working at FDIC-insured banks, regardless of how long ago the offense occurred, which plaintiffs argued disproportionately impacts people of color. The law allows those who have been disqualified to seek a waiver with the FDIC and allows banking institutions looking to hire those with previous convictions to sponsor such applications.

A unanimous three-judge panel ruled that because federal law prohibits banks from employing individuals convicted of a crime involving "dishonesty or a breach of trust," disqualifying those workers was "a business necessity." "We hold that even if Wells Fargo's policy of summarily terminating or not hiring any ... disqualified individual creates a disparate impact, the bank's decision to comply with the statute's command is a business necessity under Title VII," the panel said. The court also stated that the bank made a sound business decision, given that banks that are covered by the FDIC face up to $1 million in fines per day for hiring such workers.

The plaintiffs had argued that the bank could have combated the alleged disparate impact by sponsoring the employees' waiver applications. But the panel disagreed, questioning the statistics the putative class presented as evidence and noting that the waiver is not a guarantee of success.

Many organizations in regulated industries may be subject to similar federal hiring restrictions, and the Eighth Circuit's opinion provides these regulated employers with at least some helpful guidance on how to apply such laws to employment decisions.

The case is Williams et al v. Wells Fargo Bank NA, case number 16-4372, in the U.S Court of Appeals for the Eighth Circuit.


Thank you for your interest in Business Information Group. We have received your message and will contact you in one business day or less.
Something went wrong. Try again
You have exceeded the number of attempts to submit this form. As a result, your IP address has been temporarily blocked.
Something went wrong. Try again

Get In Touch

Send a Message *fields required

What are your Interests?optional

Even our RFP PROCESS is state-of-the-art.

Find out why

What Our Clients Are Saying

Everyone I have contacted at Certiphi has been a complete pleasure to work with. The Certiphi customer service rivals every other customer service I come in contact with. Everyone is always so professional, yet super nice! Thanks for all you do and keep up the amazing work and impeccable service that you provide!!!

Human Resources Assistant
Large Medical Staffing Firm

Thank you so much! You have such an incredible reputation within our office; I think we would all say your customer service levels are continually at about 125%!

Human Resources Generalist
Medical and Surgical Hospital

The response time has been very quick. The turnaround times are great. I love your systems and that I can go in and look at the process as its going.

Human Resources Manager
Medical Staffing Agency

It’s such a great customer service that you provide and I’m happy to tell that to anyone.

Pastoral Care Associate
Large Children's Hospital

Working with Certiphi has been such a pleasure. Certiphi has taught me so much, not just about backgrounds but also the meaning of great business.

Human Resources Specialist
Large Medical Staffing Firm

We flew through our NCQA licensure review.  We very much appreciate Certiphi's help in earning a 100% score for the files!

Accreditation Manager
Hospital System Analytics Company

You are about to leave

Ok, Continue Cancel