A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit handed down a surprising decision recently when it ruled that the state of Texas has legal standing to challenge controversial guidance issued by the Equal Employment Opportunity Commission (EEOC) in 2012 restricting an employer’s right to consider arrest and conviction records of job applicants in making selection decisions.
Texas sued the EEOC in 2013, challenging the EEOC’s Guidance on grounds that it conflicted with Texas’s state law that prohibited felons from being hired for certain jobs. A federal trial court subsequently dismissed the suit on a finding that Texas did not have legal standing to sue.
The decision by the Fifth Circuit in Texas v. EEOC, No. 14-10949 (5th Cir. June 27, 2016), reverses that ruling. Although the EEOC argued that the Guidance was not a “final agency action” because the Commission had no ability to enforce the Guidance, and that it was not legally binding, the appeals court disagreed. The court found that any employer subject to the EEOC’s jurisdiction risked an enforcement action and potential liability by not complying with the Guidance. Accordingly, the Guidance had “legal consequence,” making it a final agency action that can be challenged in court.
A copy of the Fifth Circuit’s ruling in Texas v. EEOC is available here.
Members of the Equal Employment Advisory Council (EEAC) can read more here.