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New Decision on Hawaii’s Arrest & Court Record Discrimination Law: What Does it mean for Employers?

Oct 26, 2006

by Carolyn Gugelyk, Pacific Business News/HSBA Special Supplement

On August 30, 2006, the Hawaii Supreme Court issued its very first decision on Hawaii’s law which prohibits employment discrimination based on arrest and court record, in a case against Home Depot U.S.A. Inc. (No. 27190). In this case, the employee was hired by the Company as a sales clerk four years after he was convicted for a drug offense. No background check was conducted at the time of hiring. Over a year later, the employee applied for a position as a department supervisor. At that time, the Company conducted a background investigation, found out about the employee’s conviction, and terminated his employment because of the conviction. The employee sued.

Hawaii law prohibits employment discrimination based on arrest and court record. However, there is an exception in the law which allows employers to consider convictions in the last ten years that bear a “rational relationship to the duties and responsibilities of the position.”

After appealing dismissal of his case against Home Depot to the Hawaii Supreme Court, the employee argued that (1) the Company should have conducted a background check only when he was hired, not over a year later; (2) the Company should not have fired him for a conviction that occurred before he was hired; and (3) he was rehabilitated and no “rational relationship” existed between his drug conviction six years earlier and his job duties.

On the first argument, the Court found for the Company. It held that employers are allowed to consider the conviction records of both applicants and current employees. Thus, even if an employer did not conduct a background check when an employee is hired, it can do so later when it is deciding whether to promote the employee to a different position. Note that for applicants, an employer must wait until after a conditional job offer has been made to make any inquiry into conviction record.

On the second argument, the Court also found for the Company. It held that an employer can consider both convictions that happened during the employee’s employment and convictions that happed before the employee was hired, if the conviction is within the last ten years excluding periods of incarceration.

On the third argument regarding whether a “rational relationship” existed, the Court explained that “the plain and obvious meaning of the phrase is found in the words themselves, i.e…..the relationship between the conviction and employment must be rational.” However, the Court did not provide any specific examples or extensive guidance on the meaning of phrase. The Court also did not make a final decision on whether Home Depot was justified in firing the employee. Since the parties made their arguments solely on the basis of the allegations of the Complaint without additional evidence, the case was sent back to the trial court, for both the employer and the employee to present additional evidence and arguments on whether or not a “rational relationship” existed.

In conclusion, employers need to continue to carefully apply the “rational relationship” test and to balance providing a safe workplace with providing rehabilitation and employment opportunities for people seeking to turn their lives around.

Permission to reprint given by the Hawaii State Bar Association,1132 Bishop Street, Suite 906, Honolulu, Hawaii  96813.

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