Third Circuit Rules Pennsylvania Employers Cannot Reject Applicants Solely on Disclosed Criminal History
A federal appeals court has ruled that Pennsylvania employers must adhere to state criminal history protections even when a job applicant voluntarily discloses a past conviction, closing a perceived loophole in state labor law. The decision, issued by the U.S. Court of Appeals for the Third Circuit in the case of Phath v. Central Transport LLC, establishes that the source of the criminal record information does not exempt employers from the procedural requirements of the Criminal History Record Information Act (CHRIA).
The ruling stems from a lawsuit filed by Rodney Phath, a commercial truck driver who applied for a position with Central Transport. During the interview process, Phath voluntarily informed the company that he had been convicted of armed robbery fifteen years prior, a crime for which he had served six years in prison. Despite his relevant experience, commercial driver’s license, and federal clearance to access secure ports, Central Transport immediately rejected his application based on the disclosure. Phath sued, arguing the company violated CHRIA, which prohibits employers from considering convictions unless they relate to the applicant’s suitability for the specific job.
The central legal dispute focused on the interpretation of how an employer receives criminal history information. Central Transport successfully argued in a lower district court that CHRIA regulations applied only when an employer obtained a formal report from a state agency. They contended that because Phath offered the information himself, the statutory obligations—such as determining job suitability and providing written notice of rejection—did not apply.
Writing for the Third Circuit, Circuit Judge Stephanos Bibas reversed the lower court’s dismissal. The appellate panel determined that the statute’s language focuses on the “receipt of information which is part of” a criminal history file, regardless of whether that information comes from a background check vendor or the applicant’s own mouth. Judge Bibas noted that excluding voluntary disclosures would create a perverse incentive where honest applicants lose legal protections simply for being forthright.
Under this interpretation of CHRIA (18 Pa. C.S. § 9125), employers in Pennsylvania are now clearly mandated to follow a two-step process for any criminal history consideration. First, they may only consider felony and misdemeanor convictions (not arrests) to the extent that they relate to the applicant’s “suitability” for the position. Second, if an employer decides not to hire an applicant based in whole or in part on their criminal history, they must provide the applicant with written notice of that decision.
The ruling has sparked debate regarding the balance between applicant rights and employer autonomy. Attorneys representing business interests have raised objections, arguing that the decision imposes significant administrative burdens on companies. By expanding the definition of “receipt of information,” employers may now face liability for failing to issue formal written rejection notices for informal conversations where a past crime is mentioned. Furthermore, defense counsel for Central Transport argued that this interpretation renders local “ban-the-box” ordinances—which delay inquiries into criminal history—redundant, though the court rejected this reasoning, stating that state law sets a floor of protection that cities can exceed.
Employers also expressed concerns regarding negligent hiring liability. Companies in safety-sensitive industries, such as transportation and logistics, often argue that strict discretion is necessary to maintain public safety and limit exposure to lawsuits if an employee reoffends. While CHRIA does not force employers to hire applicants with relevant convictions, it removes the option to issue a blanket rejection without an individualized assessment of how the specific crime impacts the specific job duties.
This decision is binding for federal courts applying Pennsylvania law and provides a unified standard for HR departments across the Third Circuit’s jurisdiction. Legal experts advise that employers should immediately review their hiring scripts and training materials to ensure that interviewers do not issue on-the-spot rejections when an applicant discloses a record. Instead, hiring managers must document their assessment of the candidate’s suitability and ensure formal written notice is provided if the criminal history plays any role in a decision to deny employment.
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