By Thomas Ahearn, ESR News Blog

On September 29, 2010, Governor Arnold Schwarzenegger signed into law California Senate Bill 909 (SB 909), which appears to be the first law in the nation that addresses the issue of personal information being sent offshore (outside the United States or its territories).

SB 909 – authored by State Senator Rod Wright (D – Inglewood) – amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California. 

The bill requires that a consumer must be notified as part of a disclosure before the background check of the web address where a consumer “may find information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.”

If a background screening firm does not have a web site, then the background screening firm must provide the consumer a phone number where the consumer can obtain the same information. 

The background screening firm’s privacy policy must contain “information describing its privacy practices with respect to its preparation and processing of investigative consumer reports.”

Specifically, background screening firms in California (and firms that do business in California) must have a statement in their privacy policy entitled “Personal Information Disclosure: United States or Overseas” that indicates whether the personal information will be transferred to third parties outside the United States or its territories.

The bill defines “third parties” as  including, “but not being limited to, a contractor, foreign affiliate, wholly owned entity, or an employee of the investigative consumer reporting agency.”

The bill also requires a “separate section that includes the name, mailing address, e-mail address, and telephone number of the investigative consumer reporting agency representatives who can assist a consumer with additional information regarding the investigative consumer reporting agency’s privacy practices or policies in the event of a compromise of his or her information.”

In the event a consumer is harmed by virtue of a background screening firm negligently sending data offshore, the bill provides for damages to the consumer. 

The bill goes into affect January 1, 2012.  This will presumably allow time for background screening firms to provide new releases to employers, or to modify the language on online systems. 

The full text of California Senate Bill 909 can be found at: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0901-0950/sb_909_bill_20100929_chaptered.pdf.

Employment Screening Resources (ESR) does not offshore personal data, and all domestic background checks are performed exclusively in the United States. ESR will provide more a detailed analysis of the new law in upcoming blogs. 

For more information about background checks, visit Employment Screening Resources (ESR) at http://www.esrcheck.com/.

Sources:
http://gov.ca.gov/press-release/16089/
http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0901-0950/sb_909_bill_20100929_chaptered.pdf

By Lester Rosen, ESR President

It appears that a new industry is popping up, whereby employers can go to third party firms that will scour the internet and locate and assemble a dossier on an applicant’s cyber identity.  These “social network background checks” will search social networking sites like Facebok and Twitter, blogs, and anywhere else on the Internet for information about job applicants, including things they may have put online yeas ago and completely forgotten about.

Companies providing social network background checks present a number of challenging questions that HR professionals and recruiters will need to deal with:

• First, such a site may well be categorized as a Consumer Reporting Agency (CRA).  Under the FCRA section 603(f) a CRA can be a third party firm that engages is the “assembling or evaluation” of consumers for employment.   That means that these types of sites are essentially background checking firms, with all of the same legal duties and obligations of any other background firm.  Therefore, such sites need to have full FCRA compliance, including client certifications under FCRA section 604 as well as adverse action notices and numerous other obligations, such as re-investigation upon request. Background checking is subject to heavy legal regulation.  
• Another issue is authenticity. Under FCRA section 607(b), a Consumer Reporting Agency needs to exercise “reasonable procedures to assure maximum possible accuracy.”  The issue of course is how to know what is real or authentic before reporting it to an employer.  If a social site contains something negative, how is the firm that supplies the information to go about verifying that it is accurate, authentic, and belongs to the applicant. If the search should happen to turn up a criminal record, then the obligations are even heavier.  A CRA must either give notice to the applicant at the same time it notifies the employer that a criminal record is being reported or it must confirm the information is complete and up to date, which typically means going to the courthouse.  In California, state law does  not even allow he notice option.  
• There is also the possibility that some of the information obtained from a social networking may meet the definition of a special kind of background report called an “Investigative Consumer Report (ICR).” If so, there are additional special rules if matters that are likely to adversely impact employment, such as revivifying the information from another source or ensuring the information came from the best possible source.
• Another big challenge for these types of web sites is discrimination allegations.  Employers or recruiters may be accused of disregarding candidates who are members of protected classes by passing over the online profiles of people based on prohibited criteria such as race, creed, color, nationality, sex, religious affiliation, marital status, or medical condition. All of those are things that may be revealed by an online search.  There may even be photos showing a physical condition that is protected by the Americans with Disabilities Act (ADA) or showing someone wearing garb suggesting their religious affiliation or national origin. This issue is sometimes referred to as Too Much Information or TMI.

The problem is that once an employer recruiter is aware that an individual is a member of a protected group, it is difficult to claim that they can “un-ring the bell” and forget he or she ever saw it.  Employers may be exposed to “failure to hire” law suits based upon discrimination or Equal Employment Opportunity Commission (EEOC) claims. 

Another problem yet to be fully explored by the courts is privacy.  Contrary to popular opinion, everything online is not necessarily fair game.  Certainly if a person has not adjusted the privacy setting so that his or her social network site is easily available from an Internet search, that person may have a more difficult time arguing that there is a reasonable expectation of privacy.  However, the terms of use for many social network sites prohibit commercial use and many users literally believe that their social network site is exactly that, a place to freely socialize.  The argument would be that in their circles, it is the community norm, and a generally accepted attitude, that MySpace or Facebook pages are off limits to unwelcome intruders, even if the door is left wide open.  After all, burglars can hardly defend themselves on the basis that the door was unlocked so they felt they could just walk in. 

Another issue is legal off-duty conduct.  A number of states protect workers engaged in legal off-duty conduct. If such a search reveals legal off duty conduct, a candidate can claim they were the victims of illegal discrimination  

These concerns are just the tip of the iceberg.  Employers need to be very careful when it comes to harvesting such information from the internet.  How and when an employer obtains such information is critical. For example, employers may have increased protection if such searches are done after there has been a conditional offer, and consent has been given.   Legality may also depend on whether the employer has well written job description with the essential functions of the job defined, so that information used from such searches can be justified.  Another issue is whether employers engage in any sort of objective analysis using metrics. 

The bottom line: Before using the internet to screen candidates, or using third party services, see your labor attorney.  

To read a related article on social network background checks, ‘The Rush to Source Candidates from Internet and Social Networking Sites,’ visit: http://www.esrcheck.com/wordpress/2009/08/01/the-rush-to-source-candidates-from-internet-and-social-networking-sites-2/.

For more articles on social network background checks, visit: http://www.esrcheck.com/wordpress/tag/social-networking-sites/page/2

For more information on background checks, visit Employment Screening Resources (ESR) at http://www.ESRcheck.com.

Source: http://www.esrcheck.com/wordpress/tag/social-networking-sites/page/2/

By Thomas Ahearn, ESR News Blog

To the relief of a number of California employers, California Governor Arnold Schwarzenegger has vetoed a bill passed by the California Legislature– AB 482 – that would have limited the use of credit reports by employers during employment background checks.

Assembly Bill (AB) 482 would have prohibited employers from using credit checks for employment purposes, except in limited circumstances.  In his “veto message” to the members of the California state assembly, the Governor stated that he vetoed the bill because existing law already provided protections for employees from improper use of credit reports and that the bill would “significantly increase the exposure for potential litigation over the use of credit checks.”

The Governor’s veto message is available on a Legislative Update press release at http://gov.ca.gov/press-release/16065/:

To the Members of the California State Assembly:

I am returning Assembly Bill 482 without my signature.

This bill would prohibit an employer from using a consumer credit report for employment purposes with certain exceptions.

This bill is similar to legislation I have vetoed for the last two years on the basis that California’s employers and businesses have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports. As with the last two bills, this measure would also significantly increase the exposure for potential litigation over the use of credit checks.

For these reasons, I am unable to sign this bill.

Sincerely,

Arnold Schwarzenegger

The use of credit reports by employers during employment background checks has become a very controversial subject. Several states have limited the use of credit reports for employment purposes and a federal bill seeks to ban credit report checks for most employment screening.

The Employment Screening Resources (ESR) News Blog has posted several articles on the use of credit repots during employment background checks:

• New Illinois Law Prohibits Pre-Employment Credit Checks on Most Job Applicants
• Oregon Issues New Rules on Use of Credit History for Employment Decisions
• Federal Bill Seeks To Ban Credit Report Checks for Most Employment Screening

However, ESR has also written about how ‘Credit Reports of Job Applicants May Not Always Be So Important To Employers’ to address concerns of applicants who are concerned how their damaged credit would affect their job searches. Employment credit checks are not as common as most people think.

According to a recent survey from the Society for Human Resource Management (SHRM), while 60% of organizations performed some type of credit report checks on job candidates, only 13% conducted credit report checks on all job candidates and 47% of organizations performed credit report checks on selected job candidates, mostly for executive positions or positions with financial responsibility or access to confidential or proprietary information.

For more information on background checks and credit reports, visit Employment Screening Resources (ESR) at http://www.ESRcheck.com.

Sources:
http://gov.ca.gov/press-release/16065/
http://dl5.activatedirect.com/fs/distribution:letterFile/yvcee9xanplikz_files/z5mlul9x4a1k16?&_c=d%7Cyvcee9xanplikz%7Cz5msx9bcq0v1fm&_ce=1285692164.e3bbe42d582391f05909ff900f2c86a6
http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0451-0500/ab_482_bill_20100923_history.html

By  Thomas Ahearn, ESR News Blog

A story from south Florida demonstrates how criminal results found in database searches during background checks may be incorrect and the problems and embarrassment that can result from such mistakes.

According to a report on NBCMiami.com, a candidate running for Cooper City, FL commission named David Nall was falsely labeled a criminal after a required background check database search erroneously stated that he had been arrested for credit card fraud in 1987.

Due to a recently passed ordinance, a background check on all nine candidates was conducted by City Hall, NBCMiami.com reports, and although City Hall never published the results of the background checks, they were released to five parties – including the Mayor’s Office – who requested them.

By the time Nall – who had no criminal record in a subsequent Florida Department of Law Enforcement (FDLE) check – was made aware of the mistake on his background check, supporters of his opponent’s campaign had already gone door-to-door with the false report and spread news of his supposedly crooked past through the small town, according to NBCMiami.com. Nall even told the South Florida Sun-Sentinel that that his ten-year-old daughter even asked him if he was a criminal.

NBCMiami.com also reports Cooper City blamed the incident on a defect in the database of the background check vendor,   and posted a note on the City Hall website saying Nall had a clean record and apologized for releasing false information about him:

PUBLIC NOTICE CITY OF COOPER CITY CORRECTION AND RETRACTION OF INACCURATE REPORT ON CANDIDATE BACKGROUND

Please be advised that pursuant City Commission Resolution 10-8-4, as adopted on August 17, 2010, the City attempted to access a criminal history record check for all City Commission candidates for the November 2, 2010 City election. However, because of a defect in a portion of the criminal history record search data base, inaccurate information was received by the City (and made available for public inspection) mistakenly suggesting that District 2 Commission candidate David A. Nall had a criminal record from a 1987 matter. As a result of a prompt objection from Candidate Nall, the City immediately examined the matter further and has determined that the criminal history report received by the City was inaccurate and that there is no verification that any criminal violation ever occurred. Accordingly, please be advised that based upon reliable FDLE data, Candidate Nall has a clean (no criminal record) criminal history background check under the terms of Resolution 10-8-4. The City respectfully apologizes for this incident.

Based upon this news story, it appears the false accusation stemmed from a database search as part of a background check. As noted in numerous articles from Employment Screening Resources (ESR), such database searches can easily result in a “false positive,” meaning a person is incorrectly labeled a criminal when they are not. ESR has a policy of always checking the results of any database “hit” at the country courthouse level.

For more information on databases searches, read “Criminal Databases & Pre-Employment Screening: The Good, the Bad, and the Ugly,” which investigates all aspects of criminal database searches.

• The Good: Criminal records database searches are valuable because they cover a much larger geographical area than traditional searches, which are run at the county level. Since there are more than 3,200 jurisdictions in America, not all courts can be checked on-site.
• The Bad: Despite their value, criminal records databases have serious flaws, including incomplete records, name variations, and untimely information. Also keep in mind that database checks by private screening firms are NOT FBI records. 
• The Ugly: Inaccuracy is only one pitfall of national criminal database searches. They also make employers vulnerable to a number of legal landmines, especially when it comes to confirming if the record is current and accurate and even belongs to the applicant. 

The article can be found at http://www.esrcheck.com/articles/Criminal_Databases.php. For more information on background checks and database searches, visit Employment Screening Resources (ESR) at http://www.ESRcheck.com.

Source:
http://www.nbcmiami.com/news/local-beat/City-Says-Sorry-For-Erroneous-Report-Calling-Candidate-a-Crook-103786279.html 
http://www.coopercityfl.org/vertical/Sites/%7B6B555694-E6ED-4811-95F9-68AA3BD0A2FF%7D/uploads/%7B4E7AD956-8E5F-48B9-AEC6-21A35A52DE23%7D.PDF
http://www.esrcheck.com/articles/Criminal_Databases.php

By Lester Rosen, ESR President & Thomas Ahearn, ESR News Blog

According to a report from KECI NBC 13 in Missoula, Montana, the family of a volunteer firefighter killed in a 2008 crash has filed a lawsuit claiming that FedEx, the world’s largest express transportation company, and the owner of the semi truck that killed the victim were negligent in hiring the driver of the semi truck and should have known that the driver was “incompetent and unfit to perform the job that he was hired to perform based on his horrendous driving record.”

The volunteer firefighter had stopped to help another motorist and was sitting in his truck on the shoulder of an Interstate highway with his emergency lights on to create a safety zone for a one-vehicle rollover when the driver of the semi truck – who was later accused of driving too fast for conditions – slammed into the firefighter’s truck, KECI reports. The driver of the semi is facing a negligent homicide charge and pleaded not guilty. The matter is still pending in court.

The lawsuit filed by the family of the deceased volunteer firefighter includes a claim of “Negligent Hiring and Retention” against both FedEx and the owner of the semi truck claiming that the Defendants:

• Knew, or in the exercise of reasonable care should have known, that driver of the semi truck was incompetent and unfit to perform the job that he was hired to perform based on his horrendous driving record.
• Had a duty of reasonable care owed to Plaintiffs to hire and retain competent, qualified, and safe employees.
• Breached their duty of reasonable care by hiring and retaining the driver who was incompetent, unfit, and dangerous.
• Failed to exercise reasonable care, which was the proximate cause of injuries and death and damages suffered by Plaintiff.

To read the full text of the lawsuit, click here. The matter is still pending in court.

Every employer carries the obligation – the duty – to exercise reasonable care for the safety of others when hiring, according to ‘The Safe Hiring Manual – The Complete Guide to Keeping Criminals, Terrorists, and Imposters Out of Your Workplace,’ a comprehensive guide produced by background check firm Employment Screening Resources (ESR). The legal description of the duty of care – “due diligence” – means the employer must consider if a potential new employee represents a risk to others in view of the nature of the job.

If an employer fails to exercise due diligence in the hiring process and a person is harmed by an employee, that employer can be sued for damages in a civil lawsuit for failure to perform a legal duty. The name of the legal action is called “negligent hiring,” which is the flip side of “due diligence.” If an employer hires someone who they either knew or in the exercise of reasonable care should have known was dangerous, unfit, or not qualified for the position, the employer can be sued for negligent hiring if injuries or death occur.

Understanding how due diligence is associated with the liability for negligent hiring is critical for any employer. If a bad hire does something to force an employer to defend in court, then an employer must show how it took appropriate measures of due diligence. Employers that do not perform due diligence are sitting ducks for litigation, including attorneys’ fees and big damage awards.

Employers that implement and follow a Safe Hiring Program (SHP) show due diligence measures that are a powerful legal protection. While the cost of exercising due diligence through a SHP is usually very modest, employers need to measure the risk of hiring blind with the risk of litigation and attorney fees stemming from a single bad hiring decision that may cause injuries and death.

For more information on background checks and negligent hiring, visit Employment Screening Resources (ESR) at http://www.ESRcheck.com.

Sources:
http://www.nbcmontana.com/news/25122686/detail.html
http://www.nbcmontana.com/download/2010/0922/25122750.pdf