Summary: Employers have a duty to investigate the accuracy of any criminal conviction report prior to terminating an employee on the basis of such information where there is evidence that the report may be incorrect.
Facts: Tracey Molina was hired by Premier Automotive Imports of CA, LLC (“Premier”) in 2014. She did not disclose on her job application a dismissed 2010 conviction for misdemeanor grand theft, and she passed Premier’s criminal background check. She had been working for Premier for four weeks when the Department of Motor Vehicles (“DMV”) mistakenly reported that Molina had a criminal conviction related to Molina’s application for the Business Partnership Automation Program. Without investigating, Premier terminated Molina for “falsification of job application,” even after she explained to her superiors that her conviction had been dismissed by court order. Although the DMV issued a corrected notice three weeks later, Premier did not rehire Molina. Molina filed a retaliation complaint with the Labor Commissioner. The Labor Commissioner determined that Molina had been wrongfully terminated and ordered her reinstatement with back pay. Premier appealed, but its appeal was denied. Premier then failed to comply with the Labor Commissioner’s orders. In turn, the Labor Commissioner filed an enforcement action on Molina’s behalf. Following the Labor Commissioner’s presentation of evidence at trial, the trial court granted Premier’s motion for nonsuit, finding an absence of any evidence that Premier was aware at the time it terminated Molina that her conviction had been judicially dismissed. The Labor Commissioner appealed.
Court’s Decision: The California Court of Appeal reversed. Premier was not entitled to judgment as a matter of law because the Labor Commissioner presented sufficient evidence that Premier was aware or had reason to believe that Molina’s criminal conviction had been dismissed and used the dismissed conviction as a factor in her termination, in violation of Labor Code section 432.7. Premier had credible information from its own background check suggesting that the DMV letter was incorrect or incomplete, and Premier then failed to investigate the discrepancy. In addition, Molina testified that she told her superiors who made the termination decision multiple times that the conviction had been dismissed.
Practical Implications: California law places complex and detailed limitations on employers’ ability to consider applicants’ criminal backgrounds. This case is an important reminder that employers need to exercise due diligence and fully investigate when an applicant’s criminal background check may adversely affect an employment decision, including investigation of any credible evidence that the information suggesting a criminal history is erroneous. FULL ARTICLE