Waterloo, Iowa Faces Lawsuit Over Ban the Box Law

The Iowa Association of Business and Industry recently filed a lawsuit against the city of Waterloo, the Waterloo Commission on Human Rights and City Attorney Martin Peterson based on the City Council’s passage of a ban the box bill.

As noted on its website, the Iowa Association of Business and Industry believes the passage violates state law, specifically Iowa Code 364.3, which states:

A city shall not adopt, enforce, or otherwise administer an ordinance, motion, resolution, or amendment providing for any terms or conditions of employment that exceed or conflict with the requirements of federal or state law relating to a minimum or living wage rate, any form of employment leave, hiring practices, employment benefits, scheduling practices, or other terms or conditions of employment.

Effective July 1, 2020, Waterloo’s ban the box ordinance titled, “Unfair Use of Criminal Record in Hiring Decisions”, prohibits employers from including the criminal history question on any application. The ordinance also prohibits covered employers from:

• Making any inquiry into, or requiring an individual to disclose, any convictions, arrests or pending charges during the application process (including interviews). The application process ends when a conditional offer is extended. Employers may consider any criminal history voluntarily disclosed by the applicant.
• Making an adverse hiring decision based solely on an individual’s arrest record or pending criminal charges that have not yet resulted in a conviction.
• Making an adverse hiring decision based on criminal records that were expunged, erased, received an executive pardon or which were otherwise legally nullified.
• Making an adverse hiring decision based on an individual’s criminal record without a legitimate business reason.

A “legitimate business reason” is defined as: (i) situations where the nature of the criminal conduct has a direct and substantial bearing on the fitness or ability to perform the duties and responsibilities of the position (requires analysis of several factors), (ii) situations where the granting of employment would involve unreasonable risk of substantial harm to property or to the safety of individuals or the public, or to business reputation or assets, (iii) positions working with children, developmentally disabled persons and vulnerable adults where the conviction record is against the aforementioned population and (iv) situations where the employer must comply with a federal or state law or regulation pertaining to background checks and the criminal conduct is relevant to the individual’s fitness for the position.

Employers with fifteen (15) or more individuals regularly employed within the City of Waterloo are covered by this ordinance. Job placement and referral/employment agencies are not considered employers under the ordinance except when hiring for their own internal needs.

Impacted employers should continue monitoring this lawsuit and it’s potential effect on the ban the box ordinance slated to go into effect later this summer.