The client,* an applicant for a federal contracting position in the Southeast, called me despondent and looking for advice. Years ago, he had been arrested on baseless child abuse and theft charges. He thought the episode was long behind him – especially because the arrest had been expunged by court order – only to now discover that his prospective new employer was requiring a completed SF-86 before making a hiring decision.
The SF-86 required the client to disclose an arrest that state law would otherwise have allowed him to lawfully withhold from the employer. Of equal importance, the arrest was not a statutory disqualifier for security clearance. Invitation for a lawsuit? You bet.
Use of Federal Forms Tempting (But Dangerous) for Clearability Assessment
The hot topic at Facility Security Officer (FSO) and Cleared Recruiting Seminars these days seems to be pre-employment screening of job applicants for “clearability.” From both a human resources and a financial perspective this makes sense; why spend time and money in the on-boarding process on employees who can’t obtain a security clearance?
Unfortunately, it’s not that easy. The case I describe above (which has yet to reach a resolution) is a great example of why, although tempting, it is a huge mistake for those doing business with the government to treat hiring and security clearance as one combined process – especially when it comes to using federal forms like the SF-86 for screening. Employers should think of the processes like collecting voluntary demographic information on job applications: the information is important for Office of Federal Contract Compliance Programs (OFCCP) reporting, but cannot be used for discriminatory hiring decisions. As such, Human Resources departments have to establish a credible “wall” between incoming resumes and any affiliated demographic information collected.
The separation between security clearance paperwork and hiring decisions
By its very nature, no such wall exists between the collection of security clearance papers and hiring decisions. The former informs the latter when it comes to “clearability.” That means that even legitimate goals like efficiency and cost savings may not save an employer from the appearance that information obtained from an SF-86/SF-85P/OF-306 was used for an improper discriminatory purpose if the applicant is not hired. Here are just a few of the ways that could happen:
Demographics: A quick perusal through an applicant’s SF-86 is enough to obtain a mountain of information that is patently illegal under federal and/or state laws for employers to utilize in hiring decisions. This includes age, gender, sexual orientation (via spouse or cohabitant’s identity), family status, national origin, and protected veteran status. You would never dream of asking this information on a job application, but the SF-86 is effectively a job application when used by employers for determining pre-employment “clearability.”
Finances: At least 10 states restrict or outright prohibit employers from obtaining credit reports on job applicants. The SF-86 provides a treasure trove of applicant financial information and is arguably the legal equivalent of a credit report for employment law purposes. Even where employers are allowed to obtain applicant credit reports, The Fair Credit Reporting Act imposes a number of stringent requirements on the employer. Generally, this is a Pandora’s Box not worth opening.
Criminal History: The SF-86 is a veritable self-reported RAP sheet. But some states – most notably, California – prohibit employers from asking about applicant arrest records. On a federal level, the EEOC has introduced further barriers to such inquiries by issuing policy guidance that, in many cases, deems asking broadly about applicant criminal history to be discriminatory against minorities under the “disparate impact” test. The better option for the employer (provided it is allowed by state law) is to include narrowly tailored, job-relevant questions about criminal history in the actual employment application. For example, if an employer is hiring a professional driver, it would be reasonable under federal rules to ask about DUI’s and other driving-related convictions.
Mental Health: Employers may run afoul of the Americans with Disabilities Act, which prohibits employers from requesting medical information on applicants until after a conditional job offer has already been made. A patchwork of state laws also can create problems here, with some states classifying certain types of mental conditions as protected disabilities.
Employer-Created Questionnaires and the National Security Exception
With all that being said, it’s worth highlighting a major nuance: employers CAN terminate or transfer employees in a cleared position who have actually been denied a clearance. There is a well-established national security exception to federal employment discrimination laws, and a complimentary principle for industry known as “business necessity.” Under the business necessity rule, an employer doing business with the federal government generally cannot be sued for terminating or transferring an employee who: (a) requires a security clearance to perform his or her job, and (b) has actually been rejected by the government for security clearance. And under the national security exception, the government has wide latitude to decide what constitutes grounds for denial of the clearance in the first place.
The key distinctions are thus twofold: the denial has already occurred (or, as I will explain in a moment, is largely inevitable based upon objective, government-issued standards), and it is the government who has made the denial decision – not the employer forecasting it from a pre-review of the SF-86. The discrimination allegations arise where employers seemingly have a crystal ball to provide them with clearability assessments in questionable cases.
Fortunately, there are some options and exceptions. Employers can – with the help of an experienced employment law attorney – craft a narrowly tailored “clearability” questionnaire for use instead of federal forms. Such a questionnaire would exclude questions on areas of federal forms ripe for discrimination claims and include the few, rare, issues that actually do trigger automatic clearance denial: criminal conviction resulting in incarceration for one year or more; mental incompetence, as determined by a government-approved psychologist or psychiatrist; discharge from the Armed Forces under dishonorable conditions; or, current unlawful use of or addiction to a controlled substance. Asking about any recent clearance denials or revocations is also reasonable.
Rejecting a job applicant for affirmative responses to these questions keeps the employer on safe ground legally. Unlike other potential issues, a clearance denial in these cases can be forecast with sufficient certainty and is thus covered under the national security / business necessity exception. Where allowed by state law, the questionnaire can also include specifically job-relevant suitability questions like the professional driver example outlined above.
An Outside-the-Box Solution
A final option employers should explore is retaining a security clearance attorney to assist employees in the clearance process. The arrangement can be offered as an employee fringe benefit and is of reciprocal value to the employer for expediting clearances and helping reduce employee turnover as a result of clearance denials. My firm offers this unique service and also participates in company employee discount programs. When you consider the time savings and business efficiency, retaining the services of a security clearance attorney or consultant can more than offset the costs.
*Some details changed to protect client confidentiality.
This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation.
