Three strikes and the EEOC guidance on background checks is out (or close to it).

In 2012, the EEOC issued its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII. The purpose of the Guidance was to help eliminate barriers in recruitment and hiring to ensure that companies running these background checks weren’t disparately impacting minorities.

Although well-intentioned, in practice, courts did not receive the Guidance well.

For example, in EEOC v. Freeman (opinion here), the Fourth Circuit Court of Appeals slammed the EEOC’s statistical analysis used to provide that these background checks discriminated against minorities.

The Sixth Circuit dealt another blow to the EEOC when it affirmed the dismissal of a similar EEOC lawsuit in EEOC v. Kaplan Higher Education Corporation (opinion here).

The third strike came last week when the Fifth Circuit Court of Appeals enjoined the EEOC from enforcing its guidance against the State of Texas. Texas had a policy of excluding persons with felony convictions—or at least those convicted of specified categories of felonies—from many public jobs.

Soon after EEOC issued the Guidance, Texas received notice that an individual who had been rejected for a Department of Public Safety job had filed a complaint with EEOC, challenging Texas’s no-felon hiring policy as having a disparate impact in violation of Title VII. Texas, in turn, sued EEOC and the Attorney General, contending that “EEOC’s rule purports to limit the prerogative of employers, including Texas, to exclude convicted felons from employment.”

Yadda, yadda, yadda, Texas wins.

With three strikes against it and a new Chair, Janet Dhillon, will the EEOC continue to press its luck by trying to enforce this guidance?

Even if the answer is no, employers need to be careful when conducting background checks.

First, under federal law; namely, the Fair Credit Reporting Act,  a company can get itself into a lot of trouble — the class-action variety — if it does not take certain affirmative steps before, during, and after conducting the background check. (More on that here.)

Additionally, employers may still need to navigate state and local laws such as “ban the box” or criminal records history laws that preclude consideration of arrests when deciding who to hire. Depending on where you conduct business, your mileage may vary — especially if you are a multi-state employer.