In a case that touched upon number of issues affecting background checks, a federal district court held that even though a background check report was erroneous and inaccurate, it had no bearing on the employment decision since a hospital had already decided to not hire a candidate based upon their prior knowledge of misconduct and a bad interview.
In a decision from the U.S. District Court for the Western District of Kentucky, the plaintiff applied for a position as an Associate Medical Director. Before the background check report was returned, the hospital discovered that the plaintiff had been involved in criminal activity related to prescription drugs, although not aware of the details. The plaintiff also interviewed very poorly. The decision had already been made to continue the search to fulfill that position before the background check report was returned.
The background check report, based upon a review of a statewide repository of county court records maintained by the Kentucky Administrative Office of the Courts (AOC), reported a felony for possession of controlled substance not stored in their original container.
Upon reviewing the background check report, the Plaintiff notified the background check firm that the report was wrong. Within several minutes, the background check firm contacted the county where the offense occurred and attempted to correct the background check report to show the plaintiff only had a misdemeanor conviction (although the details were still not entirely correct).
In ruling on a motion for summary judgment, the Court ruled that even assuming all of the allegations by the plaintiff were correct, the plaintiff failed to state a grounds for relief in that the hospital had already decided NOT to hire before reviewing the inaccurate background check report, and that the incorrect report “merely supported the decision they had already made.” The court noted that the background check report was promptly amended, and although it was still not entirely accurate, did indicate the offense was only a misdemeanor.
The opinion also reviewed various difficulties in reporting public records. The Court first noted that the statewide criminal records maintained by the Kentucky AOC does not contain official court records, but is only a statewide repository of official records and that it clearly indicates in bold type that it is not an official court report. The Court reviewed the difficulties in reading and analyzing the Kentucky AOC records in this case that could lead to a misunderstanding of the actual court records from the county where the offense occurred. The Court noted the even after contacting the court clerk in Jefferson County, the background check firm still did not have an entirely accurate report, although it was correct insofar as the ultimate offense was a misdemeanor.
The Court also addressed the fact that there are different approaches to analyzing if a background check firm utilized reasonable procedures in reporting criminal records:
- The Court noted that one approach is that a background check firm is entitled to rely upon whatever is noted in the official court records, and is not obligated to go beyond that. To require more would be unduly burdensome and expensive. In addition, if there is an inaccuracy, a consumer is in the better position to note it, and can bring it to the attention of the consumer reporting agency (CRA) that can then correct it.
- A second approach is that a background check firm is responsible for looking beyond the notations in a court report to ensure the information is correct.
- A third approach is that a background check firm can report what is in a pubic record, provided that it believes the source is reputable and there is nothing to suggest that there are problems with the sources of information, or that the information appears implausible or inconsistent.
- A fourth approach is that any allegation of errors are an issue for a jury to decide, unless the issue of reasonableness is beyond question or was not the cause of an adverse hiring decision as in this case.
This case was complicated by the fact that background check firm did NOT utilize the actual county legal records, but instead relied upon on a statewide repository, which did not apparently tell the entire story. However, given that any error was not the cause of the plaintiff’s failure to get the job under the unique facts of the case, but was only an “additional cumulative justification,” the Court did not have to decide if the background check firm used reasonable procedures.
The case potentially creates a defense for background check firms sued for inaccurate reports, where the facts show that a decision has already been made not to hire and therefore the background check report was not a cause of any alleged damages.
In addition, the case also demonstrates potential dangers of using secondary sources of information instead of going to the actual courthouse to view the primary records. Although the court ultimately decided the case on the basis that the background check report did not cause the decision, the court discussion demonstrates once again that background checks are heavily legally regulated. Background check firms need to take precautions to ensure accuracy in reporting criminal records.
(As a general rule, ESR does not identity the parties involved in litigation concerning background checks. However, if any reader has a legitimate research need for the actual case and cannot locate it, please contact ESR News Editor Thomas Ahearn at firstname.lastname@example.org.)
Founded in 1996 in the San Francisco area, Employment Screening Resources (ESR) wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen and is accredited by The National Association of Professional Background Screeners (NAPBS®) . To learn more about Employment Screening Resources, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.