Lesson Last Updated: October 15, 2024

Lesson Highlights

On September 10, 2024, the San Diego County Board of Supervisors passed a local ordinance with a very tight turnaround! The “Fair Chance Ordinance” added Chapter 27 to existing business regulation related to private employers’ use of criminal history in employment decisions, and is effective October 10, 2024, with penalty enforcement effective July 1st, 2025.

In this lesson, we'll cover the following topics:

• Applicability of the Fair Chance Ordinance;
• What the Fair Chance Ordinance does;
• How it differs from California’s similar state law; and
• Record Keeping under the Fair Chance Ordinance.

Suggested next steps are highlighted in yellow! Be sure to read carefully. 

Applicability of the Fair Chance Ordinance

The Fair Chance Ordinance (or “FCO”) applies to employers with five (5) or more employees doing business in the unincorporated areas of San Diego County, including doing remote work from a location within the unincorporated areas of the County. [1]

It’s very important to note that the FCO only applies to unincorporated areas, which can be reviewed here. In other words:

• If an employer is doing business in any of the unincorporated portions of San Diego County, or the open position the employer is seeking applicants for will be working from an unincorporated portion of San Diego County, then this ordinance will apply. 
• If neither of these things are true, then the ordinance does not apply. 

But keep in mind that incorporated portions of San Diego County are still subject to the state’s similar law! We’ll touch on that more below.

Before we go any further, keep in mind that depending on the work you do, a criminal background check may not even be appropriate, so don’t panic as you read this! Speak with your attorney to create a game plan.

What the Fair Chance Ordinance Does

The ordinance prohibits covered employers from taking the following actions against any applicant:

• Declaring in a job posting or similar listing, including for transfer or promotion, any limitation due to a conviction or arrest, unless required by law;
• Including in any form of job application or similar document, including for transfer or promotion, any question that directly or indirectly asks about the individual’s criminal history; and/or
• Except as otherwise allowed or required by law, inquiring about or considering prohibited information about arrest records (not resulting in conviction), diversion programs, or any conviction that has been sealed, dismissed, expunged, or statutorily eradicated, or for which the applicant has received a full pardon or has been issued a certificate of rehabilitation.

Employers can inquire about, ask about, or consider criminal history only after extending a conditional job offer. However, once a conditional job offer has been made, employers are prohibited from taking “adverse action” against an applicant based on criminal history information without first conducting an individualized assessment of a candidate’s criminal record to determine if it has a “direct and adverse relationship” with the specific duties of the job that justify denying employment, transfer, or promotion. This is very similar to what existing state law requires, but before we dive in more deeply, let’s go over some important definitions.

For the purposes of this ordinance:

• “Applicant” means any individual applying for employment, transfer, or promotion whose employment position involves performing at least two (2) hours of work on average each week within the unincorporated areas of the county.
• “Conditional job offer” (or “conditional offer of employment”, as it’s stated in the ordinance) means an employer’s offer of employment to an applicant conditioned on the completion of certain specified requirements or conditions.
• “Adverse action” means an employer’s action or decision that materially and adversely affects the terms, conditions, or privileges of employment of an applicant or employee.
• “Individualized assessment” is not defined, but the ordinance says that it must be in writing and should consider, at minimum: 
  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense or conduct and/or completion of the sentence; and
  • The nature and duties of the job held or sought. 

To justify denying the applicant, the individualized assessment must demonstrate that one or more specific factors above have a direct and adverse relationship to one or more specific elements in the nature of the job. Make sure that your HR or hiring team is aware of these (and all other) various hoops that you must jump through to comply with the FCO. It is unlawful to “interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right” provided under the FCO. 

If the individualized assessment does not create any direct and adverse relationship to the job elements, then the applicant cannot be denied the job based on their criminal history. However, if the individualized assessment does create a direct and adverse relationship and the employer would like to deny the applicant, then the employer must notify the applicant of the decision in writing. The “preliminary notice of adverse action” must contain the following information:

• Notice of the disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer;
• Copy of the criminal background check report that was obtained;
• Notice of the applicant’s or employee’s right to file a complaint with the Office of Labor Standards and Enforcement (“OLSE”) for violation of the County’s Fair Chance Ordinance, and with the state’s Civil Rights Department (“CRD”) for violation of the Fair Chance Act; and 
• An explanation of the applicant’s right to respond to the employer’s preliminary decision before that decision is final and the deadline to respond (we’ll get to this below). The explanation should inform the applicant their response may include the submission of evidence challenging the accuracy of the criminal background report, evidence of rehabilitation or mitigating circumstances or both.

At this point, if you haven’t already looped in an attorney, you really should. In our opinion, it’s best to loop them in early, actually! If you’re our client, we’d prefer to be notified as soon as you become aware that there will need to be an individualized assessment performed. 

Applicants must be provided at least five (5) business days to respond to the preliminary notice of adverse action before the employer may make a final decision. If within that time frame the applicant notifies the employer that they dispute the accuracy of the background report and that the applicant is taking specific steps to obtain evidence, then the applicant must be provided an additional five (5) business days to do so. 

At this point, it’s a waiting game for the employer. They’re not allowed to fill the open position until the time frame comes to a close and the applicant has no additional legal rights to respond available to them. The only exception is if there are “exigent circumstances” requiring the position to be filled immediately. Again, if you have an attorney, now would be a good time to communicate with them!

The weird thing about this ordinance is that the guidance of what to do after the applicant begins obtaining their evidence just…stops. That’s right, there’s no additional information about how much time the employer has to respond once the applicant provides their evidence, what the next round of assessment looks like, etc. Because of this, we at Better would likely look to California’s state law for next steps, but you should absolutely be working with an attorney on this and they will advise for your specific situation.

How This Differs from California’s Fair Chance Act

The FCO is very similar to California’s existing “Fair Chance Act,” which tackles the exact same topic. It appears that the FCO was drafted to supplement the Fair Chance Act, and not necessarily to supersede it. Here are the key differences between the FCO and the Fair Chance Act:

• The individualized assessment must be in writing under the FCO, but employers do not have to provide their written assessment to the applicant; this is important because the City of Los Angeles and Los Angeles County ordinances have a similar ordinance that requires employers to include the assessment and reassessment with the notices. The Fair Chance Act does not require that the individualized assessment be in writing (just the preliminary notice of adverse action), though it’s wise to record everything in this very sticky area in writing. 
• The written preliminary notice of adverse action must advise applicants of their right to file a complaint with the CRD and the OLSE. This means there’s an additional agency that may intervene now. 
• The employer must hold the position open during the consideration period, absent exigent circumstances, under the FCO. This is not required under the Fair Chance Act. 
• Under the FCO, employers can face fines for non-compliance ranging from $5,000 to $20,000 starting July 1, 2025. Under the Fair Chance Act, there are no such fines, though an employer may owe other amounts, like attorneys fees and costs. [2] Other than fines though, there is no right-to-sue under the FCO itself. 

Record Keeping Under the Fair Chance Ordinance

Under the FCO, employers must retain records for a period of one (1) year from the application of employment. However, applicants can commence a cause of action against an employer within three (3) years of the illegal act under the state’s Fair Chance Act, so employers would be wise to maintain documentation for at least three (3) years, just to be safe. 

If you are an employer that utilizes criminal background checks (not reference checks) you should review your existing protocols to ensure compliance, and make sure you have systems and timekeeping mechanisms in place for adverse action notices. Remember, fines start at $5,000 under this ordinance, so speaking with an attorney to ensure proper protocols are in place might cost you a few hundred dollars to start with, but an ounce of prevention is worth a pound of cure. 

This Lesson's Sources:

[1] San Diego County Code Of Regulatory Ordinances, Chapter 27

[2] Cal. Gov. Code § 12940