In another 2008 federal case, a consumer sued a national background screening firm for negligent violation of the FCRA, on the basis that the screening firm failed to utilize reasonable procedures before reporting possible criminal hits.

The federal trial court had granted a summary judgment in favor of the background screening firm, since the plaintiff did not present any expert testimony that the procedures used by the screening firm was unreasonable. On appeal to the United States Court of Appeals for the District of Columbia District, the appellate court reversed the trial court ruling, and ruled that an expert witness was not required in a case against a screening firm for negligence, and that the report by itself can be used as “evidencing unreasonable procedures. (more…)

This issue of the ESR Legal Update and Newsletter reviews two of the lawsuits filed in 2008 against background screening firms by consumers. Although an employer may not always be named as a party in a lawsuit against a screening firm, employers should be concerned if a screening firm’s practices end up as court cases.

These court cases underscore two important facts about pre-employment background checks:

It is an area that is subject to a high degree of regulation by both federal and state law, since it involves such core societal issues as privacy, protection of the public and a safe workplace, and the ability of individuals to obtain employment.

Consumers and plaintiff’s lawyers have become very familiar with the rules that govern screening, and that unless it is done properly by knowledgeable professionals, there is an increased risk of lawsuits being filed.

There is no question that background checks are mission critical for any organization. Background checks are an essential part of any company’s due diligence efforts. The lesson from these cases, however, is that background screening has become a professional endeavor that requires a great deal of legal and subject matter expertise. Employers need to exercise caution in selecting a screening partner by making sure that the screening firm has that professional knowledge and expertise required to perform legally compliant screening.

The names of the litigants are not included in this newsletter, since it is the general principals that are important. A reader of this newsletter with a need to know the details may contact Jared Callahan, Director of Sales and Marketing at ESR for more details. He can be reached by e-mail at jcallahan@esrcheck.com

In this federal case, a national employment screening firm uncovered information that the applicant had an arrest record over seven years ago. There were no convictions, but arrests only. The federal Fair Credit Reporting Act (FCRA) prohibits the reporting of an arrest older than seven years old, unless the applicant is reasonably expected to make a salary of over $75,000 per year. See FCRA section 605 (15 U.S.C. 1681c). (more…)