The 8th U.S. Circuit Court of Appeals has determined that a company’s unwritten policy against hiring applicants with theft-related convictions was sufficient basis to exclude a minority applicant from a position with the company. EEOC v. Con-Way Freight, Inc., 8th Circ., No. 09-2926/2930, Sept. 22, 2010.

Roberta Hollins, an African-American female, was interviewed by Kenneth Gaffney, a branch manager for Con-Way Freight, for a part-time customer service position in Poplar Bluff, Missouri. During the interview, Hollins completed an application, on which she disclosed two misdemeanor shoplifting convictions.

Gaffney was impressed by Hollins, and was interested in hiring her. He discussed that plan with Kevin Beer, the vice-president of operations and Gaffney’s supervisor. Upon learning that Hollins was Black, Beer stated that Gaffney would be “opening up a can of worms” by hiring her. Gaffney continued the interview process and during a second interview with Hollins told her that his boss “told me not to hire you because if I hired you that I was just asking for the NAACP.” After completing the interview process, Gaffney told Hollins and one other candidate, Patterson – a Caucasian female – that they each had the job, and sent them both for a pre-employment drug test. However, this was in direct contravention to Con-Way’s hiring policy, which requires that prior to making an offer of employment or requiring a drug test, the personnel department must run a background check and approve the chosen candidate. Neither was done in this instance.

When Hollins did not hear from Gaffney after her drug test, she called Con-Way and was informed by Kevin Beer that Gaffney was no longer with the company. Subsequently, Gaffney’s replacement, Gary Sellers, was contacted by Anthony Godwin, a third person to whom Gaffney had offered the position. At that point, Sellers was unaware of Hollins’ discussions with Gaffney, and hired Godwin for the position. Hollins then filed a complaint with the EEOC, claiming violation of Title VII, Section 1981, and Missouri state law. The EEOC filed suit on her behalf, echoing those claims. The lower court dismissed the claims, and the EEOC (with Hollins) appealed to the Eighth Circuit.

The Eighth Circuit upheld summary judgment in Con-Way’s favor, finding that Hollins was unable to show a specific link between the alleged discriminatory animus and Con-Way’s failure to hire her. The Court pointed out that Con-Way’s policy of automatically disqualifying applicants with theft-related convictions would have resulted in Hollins’ application being rejected and, therefore, Hollins would not have been hired regardless of any discriminatory animus. While the EEOC argued that Con-Way’s policy was not in writing and was therefore not valid, the Court cited evidence produced by Con-Way that within a span of 18 months, the company had disqualified 28 applicants solely because of theft-related convictions, and that no employees at the Poplar Bluffs service center had prior criminal convictions. In addition, the Court pointed out that Hollins could not establish that she was qualified for the open position because her theft-related convictions rendered her unqualified for any position within the company.

The Eighth Circuit upheld the summary judgment in favor of Con-Way, dismissing all claims. However, it while it dismissed the federal claims “with prejudice,” meaning that Hollins cannot bring another action based upon those claims, it dismissed the Missouri state-law claims “without prejudice,” meaning that Hollins can take those claims to a Missouri state court for decision.

Employers should take note of this case for a number of reasons. First, Gaffney’s actions in going outside the established hiring protocol by offering a position to two people prior to formal background checks and an okay from the personnel department created litigation that may continue for some time into the future. Second, and just as noteworthy, is the fact that a single racially insensitive remark (that Hollins hiring would “open a can of worms”) by the vice president of operations actually triggered the chain of events that resulted in the litigation. Both of these facts indicate a critical need to train supervisors and managers to fully understand the ramifications of their actions, and to assure coordination in the hiring process to help avoid legal actions of this nature.