New Law Limits Use of Expunged Convictions in License Denials

On September 28, 2014, Governor Brown signed Assembly Bill 2396, which provides that an individual with an expunged conviction cannot be denied a license solely because of the expunged conviction, notwithstanding any other law in the Business and Professions Code.  This new law gives relief to applicants applying to certain state agencies for licenses, effective January 1, 2015.
An expungement in California is a court order issued after probation is complete, or after more than one year after a conviction for which no probation was ordered, dismissing the conviction in a limited fashion.  Expungement is granted upon a motion after successful completion of probation.
The new law only applies to agencies under the Department of Consumer Affairs (DCA).  So, unfortunately, it does not apply to the Department of Insurance and the Department of Social Services, which are not under the DCA.  In addition, a number of agencies under the DCA (i.e. Medical Board of California) are also unaffected as they have their own, separate statutory authority which allows them to consider expunged convictions to deny a license application.  However, it will apply to any agencies that were shifted under the DCA as a result of the government’s restructing over the past couple of years – which would include the Bureau of Real Estate (BRE).
Even those affected by the change in law still have some discretion when it comes to the underlying, expunged crime.  For example, under the laws that govern expungements, an expunged conviction always has to be revealed to a licensing agency.  And so an agency who has the knowledge of the underlying criminal conviction can examine it to determine whether or not the facts and circumstances of that criminal matter is still actionable.  This means that they still may use the facts and evidence in the criminal case to prove unprofessional conduct.
Furthermore, it only denies the licensing agency from using the expungement of a conviction of substantially-related crime as the sole reason for license denial.  The crime can be used to buttress or in-addition-to other reasons for which the application has been denied.
For example, although the BRE will not be allowed to deny an applicant a license solely on an expunged conviction, they can still work around it in a number of ways.  First of all, they can demand that the applicant disclose it, with the failure to do so being application denial.  Second, the underlying misconduct could be used.  For example, items charged or not charged could be pleaded in a Statement of Issues as substantially related to the profession and a ground for license denial.  This will more than likely involve crimes with any type of dishonesty or taking of others property.
However, where the conviction is rather old and the police reports have been destroyed or are otherwise unavailable, it will be very difficult or impossible for an agency to prove the conduct leading to a conviction in order to deny a license.
Note that there is no federal court or conviction expungement.  And out-of-state convictions and expungement are not affected by this change.