On September 30, 2018, the Governor signed Assembly Bill 2138, which primarily helps many license applicants with criminal records get professional licenses.  AB 2138 took effect on July 1, 2020.

After the change in the law, a plea of guilty or a verdict of guilty can only be used against a licensee or license applicant as a conviction once a judgment has been entered.  (Business and Professions Code section 7.5)   This is an important change for defendants who get deferred entry of judgment, for example.  In criminal courts, individuals granted deferred entry of judgment enter a plea of guilty, but, once they complete the program, the charges are dismissed.  Before-AB 2138, these guilty pleas could be used as “convictions” to deny license applications and punish licensees while these individuals were in deferred entry of judgment programs.  Further, Business and Professions Code section 480(d) explicitly forbids many licensing agencies from using any criminal dispositions other than misdemeanor or felony convictions to deny a license.  (This also can benefit individuals who enter pretrial diversion and never enter a guilty plea, but still have a pending criminal case.)

Under AB 2138, many convictions are no longer grounds for denial if those convictions have been either expunged, or, even if not expunged, are more than seven years old. (Business and Professions Code section 480)  Further, applicants for most licenses no longer need to answer criminal background questions on the initial license application; the agencies instead rely solely upon fingerprint (Livescan) background checks to determine criminal history.  Note: architects, cosmetology board license applicants, automotive repair dealers and some other applicants, however, still must answer criminal history background questions.  Some of the largest groups affected by these changes have been physicians, nurses, real estate salespersons and brokers, attorneys and CPAs.

There are important exceptions, however, to the purview of AB 2138.  New law changes to the Business and Professions Code only apply to agencies that operate under the Business and Professions Code.  So licenses covered by the Insurance Code (insurance producers, adjusters), the Education Code (teachers), the Financial Code (lenders, DFPI-licensed mortgage loan originators), the Health and Safety Code (child care centers, residential care homes for the elderly, foster care, nursing homes) and others are not affected.

Felony financial crimes of any age committed by fiduciaries, contractors, private investigators, funeral directors or real estate licensees can still be grounds for license denial; also, serious felonies (most violent offenses) and sex offenses of any age may result in license denial.  However, an expungement or certificate of rehabilitation can bar the agency from denying a license based upon those crimes.  Agencies are still free to deny a license due to discipline imposed by other agencies, either inside or outside of California.

There are four big takeaways from the implementation of AB 2138.  First, professionals and aspiring professionals who enter deferred entry of judgment, or DEJ, typically cannot have their guilty plea used against them to discipline or deny a license; a guilty plea alone, without a judgment later entered, is not considered a “conviction”.  Second, many convictions older than seven years can no longer be cause for denial of a license application.  Third, expungement, authorized under Penal Code section 1203.4 and 1203.4a, which once provided little relief for license applicants, is a powerful shield against denial of many licenses.  And fourth, most license applications no longer ask criminal conviction background questions, removing a tremendous source of anxiety and confusion for license applicants.

The provisions of AB 2138 and Business and Professions Code 480 are complicated; there are exceptions and special circumstances not covered in this article.  If your license has been denied due to a criminal conviction, contact Ray & Bishop for assistance.