Social Media Background Checks Conducted by Consumer Reporting Agencies Subject to Same Fair Credit Reporting Act Rules

By Lester Rosen, Attorney and CEO of Employment Screening Resources (ESR) & Thomas Ahearn, ESR News Editor

Reprinted from the NAPBS Journal for July/August 2011.

A June 2011 blog on the Federal Trade Commission (FTC) website, ‘The Fair Credit Reporting Act & Social Media: What Businesses Should Know,’ reminds employers and Consumer Reporting Agencies (CRAs) that conducting “social media background checks” using information found the Internet must follow the same Fair Credit Reporting Act (FCRA) rules applying to traditional sources of information such as employment history and criminal records that FCRA compliant screening firms have used in the past.

While the FTC never offered an official endorsement of social media background checks, the Internet contained many reports about how the FTC – the federal agency charged with enforcing the FCRA statute that controls the activities of CRAs and regulates the collection, dissemination, and use of consumer information – had given the “OK” for screening of job applicants that would include up to seven years of information from websites such as Facebook and Twitter in compliance with the FCRA.

In fact, the FTC was merely restating the obvious: that the FCRA applies to all aspects of background checks, including social media searches. 

The FTC blog reminded CRAs and employers of their obligations under the FCRA: “Employment background checks can include information from a variety of sources: credit reports, employment and salary history, criminal records – and these days, even social media. But regardless of the type of information in a report you use when making hiring decisions, the rules are the same. Companies providing reports to employers – and employers using reports – must comply with the Fair Credit Reporting Act.”

The FTC blog also emphasized if a CRA sells background reports with information derived from social media, the same FCRA rules apply: “For example, companies selling background reports must take reasonable steps to ensure the maximum possible accuracy of what’s reported from social networks and that it relates to the correct person. They have to comply with other FCRA sections, too – like providing copies of reports to people and having a process in place if people dispute what’s said about them in a report. In addition, companies must give employers who use their reports information about employers’ responsibilities under FCRA – like their obligation to provide employees or applicants with advance notice of any adverse action taken on the basis of the reports. Another key requirement: Companies selling background reports for employment must require that employers certify the report won’t be used in a way that would violate federal or state equal employment opportunity laws or regulations. Of course, given the sensitive nature of the information in reports, everyone – companies selling the reports and employers using them – has a legal obligation to keep them secure and dispose of them properly.”

The use of social media sites has become a hot button topic for employers and screeners. On one hand, failure to review such sites could be evidence of negligent hiring if such a review could have revealed negative information relevant to the employment decision, and the employer is later sued for the acts of the employee. On the other hand, viewing these sites is fraught with danger due to potential allegations of discrimination, invasion of privacy, illegal consideration of legal off-duty conduct, and issues of accuracy and authenticity. The issue is further complicated since many employers will conduct social media searches whether assisted by a CRA or not. A 2010 Microsoft survey found 79 percent of HR professionals reviewed information found on the Internet when examining job candidates. However, it is not always clear employers understand the legal limits of such searches. 

A significant problem for screening firms that attempt these searches is compliance with the accuracy requirements of the FCRA. Under FCRA section 607(b), a CRA performing background checks needs to exercise “reasonable procedures to assure maximum possible accuracy.” How does a CRA determine if the information found on the Internet about job applicants is credible, accurate, and authentic – in other words, true? How does a CRA know what information is real or authentic and actually emanated from, or relates to, the applicant before reporting it to an employer? If a social media site contains negative information, how is the screening firm that supplies the information to go about verifying that it is accurate, authentic, and belongs to the applicant? If the search happens to turn up a criminal record, the obligations grow. 

The issue becomes more complex due to cases of false postings under another person’s name on the Internet – a sort of “online identity theft.” If negative information is posted anonymously online, it may be “cyber slamming” where people commit defamation without anyone knowing their real identity or set up fake websites that do not belong to the supposed owners. Also, most people have “computer twins,” people with the exact same names online. Employers should also consider if what a job applicant says online is true, and whether it would be a valid predictor of job performance or employment related, as well as non-discriminatory. After all, people have been known to exaggerate or make things up.

Short of conducting field interviews, these are all difficult determinations to make under the FCRA. In addition, if a consumer disputes a report under FCRA Section 611, the CRA is placed in a position of having to either verify the information is accurate or delete it from the report, which also places burdens on a CRA. 

As a result of the position taken by the FTC, some CRAs may conclude that providing social media searches is a risky business given the duties placed on them by the FCRA.

One approach to minimize the risks of using social media background checks is for employers to conduct the search themselves in-house which would avoid putting a CRA in the position of figuring out how to comply with the accuracy requirements of section 607(b) of the FCRA. However, these in-house social media searches can have potential pitfalls for an employer unless safeguards are maintained to ensure that the use of information found on social media sites is fair and non-discriminatory.  If an employer does decide to utilize searches of social media sites in-house, they should be alerted about the following steps in order to avoid possible legal risks:

• If an employer uses social media searches, they should first consult their attorney in order to develop a written policy and fair and non-discriminatory procedures designed to locate information that is a valid predictor of job performance and non-discriminatory. Employers should focus on objective criteria.
• Employers should have written job descriptions that contain the essential functions of the job, as well as documented training on how to avoid discriminatory hiring practices. 
• As a general rule, the later in the hiring process social media searches are used, the less open an employer may be to suggestions that matters viewed on the Internet were used in a discriminatory fashion. The most conservative approach is to not use the Internet for a social media search until AFTER there has been a conditional job offer.
• Employers need to be concerned if information found online is potentially discriminatory to job candidates who are members of protected classes based on prohibited criteria such as: race, creed, color, sex (including pregnancy), ancestry, nationality, medical condition, disability, marital status, sexual preference, or age (40+). All of these protected criteria may be revealed by a social media search.
• Employers need to be concerned if information found on the Internet violates state laws concerning legal “off duty” conduct.
• For legal protection, the most conservative approach is to perform a social media search only after consent from the job applicant and a job offer is made contingent upon completion of a background check that is satisfactory to the employer.
• Employers should not use any fake identities or engage in “pretexting” to gain access to information online.
• Whatever an employer’s policy is regarding social media searches, it should be written.  For employers that recruit at college, there is a trend to require employers to notify students ahead of time as to their policy for searching the Internet for an applicant’s online identity.
• Employers may also use a person in-house not connected to hiring decisions to review social media sites in order to ensure impermissible or discriminatory information is not given to decision makers. The in-house reviewer should also have training in the non-discriminatory use of online information, knowledge of the job description, and use objective methods that are the same for all job candidates for each type of position. That way, only permissible information is transmitted to the person making the decision.  The person in-house conducting the review is on the other side of an “ethics” wall from any decision maker and helps prevent allegations that impermissible information was used in the hiring process.
• As a final protection, an employer may consider having the in-house reviewer first contact the applicant with any potential information found online before it is passed along to the decision maker in order to allow the applicant the opportunity to dispute the accuracy or applicability of the information. 

CRAs, as well as employers, should realize that the bottom line when conducting social media background checks is to proceed with caution. Using the Internet for screening is far from risk-free, especially since there has yet to be clear law or court cases that show how to proceed in this area. Neither CRAs nor employers should assume that everything found on social network sites is fair game in the pursuit of information on job applicants. 

About the Authors:

• Attorney Lester Rosen is Founder and President of NAPBS accredited company Employment Screening Resources (ESR), a former co-chair of NAPBS, and served as chairperson of the steering committee that founded NAPBS.
• Thomas Ahearn is Editor of the ESR News Blog.