Grand Rapids, Michigan Enacts Sweeping “Human Rights” Ordinance With Restrictions on Employment and Tenant Screening

Seyfarth Synopsis: Grand Rapids, Michigan recently amended its “Human Rights” Ordinance, effective December 1, 2019, which includes numerous considerations for employers, consumer reporting agencies (“CRAs”), landlords or property managers, and places of public accommodation.

The Grand Rapids City Commission has passed a sweeping new “Human Rights” Ordinance (“Ordinance”) which contains various employment, housing and other civil rights protections to individuals by, among other things, adding sex, gender expression, genotype, familial status, medical condition, and sources of lawful income to the list of protected classes, refining prohibitions on discrimination, and adding a retaliation section to protect individuals who bring forward complaints.

Aside from the expansion of the protected classes, what stands out most, however, are the various provisions pertaining to users and providers of background screening reports. While the state of Michigan enacted a “ban” on so-called “ban the box” laws to create uniformity within its borders, the Ordinance purports to get around this by characterizing it as a “discrimination” law, claiming that it evades preemption by any federal or state law. Of significant import to CRAs, employers, and landlords and other property managers, there are several prohibited practices in connection with background screening, which, in the context of tenant screening, appear to be a growing trend given recent developments in New York City and Seattle.

Background Screening in Employment and Housing

The Ordinance prohibits both employers and landlords or property managers from considering “arrest[s] with no conviction.” The Deputy City Attorney has opined that pending charges may be considered in employment and housing decisions.

Employers, landlords and property managers may not have blanket prohibitions on prospective employees and tenants with criminal backgrounds. Instead, if an employer, landlord or property manager would like to consider a person’s conviction record, it must carefully evaluate the conviction on a “case-by-case” basis before taking adverse action against the person. “Conviction record” is defined as “the history of all criminal convictions of an individual in any jurisdiction, including time served in prison, jail, juvenile detention, probation, rehabilitation or diversionary programs, or placement on a sex offender registry”). Case-by-case consideration includes an assessment of:

the nature and severity of the crime,
the age of the individual at the time of the crime,
whether there have been repeat offenses,
whether the individual maintained a good history before or after the conviction,
evidence of rehabilitation efforts, and
whether the crime for which the individual was convicted may pose a demonstrable risk to the health, safety or welfare of other residents or persons (which would include manufacturing or distributing illegal drugs).

The Ordinance also prohibits employers, landlords and property managers from distributing any advertisement or implementing any policy that discriminates or suggests, supports, or affirms discrimination in housing or employment,

Critically, the Ordinance likely is not limited in its application to the users of criminal history in employment and tenant screening decisions. Indeed, the law makes it unlawful for any person or entity to “conspire with, assist, coerce or request another person to discriminate in any manner prohibited by the Ordinance.” Consequently, third parties preparing criminal history background reports or otherwise assisting in or facilitating background screening for employment and tenant screening, including CRAs and temporary staffing agencies, should assess the impact of this law on their own practices.

Public Accommodation

The Ordinance also prohibits discrimination “in making available full and equal access to all goods, services, activities, and privileges of any place of public accommodation,” with limited exceptions (e.g., “an individual who displays offensive behavior, engages in disorderly conduct, or otherwise represents a clear threat to public health, safety, and welfare may be removed from, or prevented from entering, a public accommodation”). Public accommodation is defined, in relevant part, as “a facility, … offering or furnishing goods, services, places, privileges, or advantages to the general public for purchase, consumption, use, or acquisition, including, but not limited to, hotels, motels, housing, restaurants, taverns, concert and entertainment venues, retail and service enterprises, public services, and certain educational institutions.”

Additional Considerations

The Ordinance also adds bias and retaliation to the list of definitions, as well as sex, gender expression, genotype, familial status (a new add for employment discrimination), medical condition, and sources of lawful income (a new add for employment and housing discrimination) to the list of protected classes. Additionally, the law now includes a non-retaliation provision to protect individuals who file complaints of violations.

The Ordinance provides for a private cause of action or redress through an agency process and/or enforcement by the City Attorney. In addition to actual damages and attorney’s fees, the Ordinance allows the City to issue a civil infraction penalty and seek injunctive relief.

Next Steps

Employers, CRAs, landlords and property manages, and places of public accommodation located in Grand Rapids should ensure that their practices comply with the Ordinance immediately. We are seeing a spike in laws regulating the use of criminal records information in tenant and other leasing situations and, thus, encourage those that use and provide tenant screening reports to continue to monitor developments in this rapidly growing area of the law.