All posts by Les Rosen

2010 Trend is focus on privacy and data protection

By Les Rosen, Employment Screening Resources

2010 Trends in Screening–Trend Three:

Employment Screening Resources (ESR), a leading national online employment screening background firm, is releasing the ESR “Third Annual Top Ten Trends in the Pre-Employment Background Screening Industry” for 2010.   This is the THIRD of the ten trends ESR will be tracking in 2010.  The ten trends will be released over the next three weeks:

3. Focus on privacy and data protection

Heating up even further in 2010 will be issues surrounding data protection and privacy.  The issues are moving beyond network security  and there is beginning to be an examination about where the data is actually going for processing. 

 The two top issues — sending data offshore or to home workers.  A group  called ConcernedCRA now has more than 120 screening firms that have signed on to a standard that opposes sending Personally Identifiable Information (PII) offshore beyond U.S. privacy laws to be processed.  See  A bill was introduced into Congress in June  2009 that would limit the offshoring of data without notice in the financial sector.  A shocking undercover investigation by the BBC in 2009 showed just how easy it was to purchase PII from a call center in India. 

Of course, identity theft can occur in the U.S., but once data physically goes beyond U.S. privacy laws, consumers have less resources and recourses.  Equally of concern to applicants is the use of home workers, where a consumer’s PII may be spread across kitchen tables and dorms rooms throughout America and be visible to who knows who.  Because of concerns over identity theft and data protection, employers will start to be more concerned with where applicant data is physically located. Part of this trend will be continued state efforts to remove or protect private information.  An example in 2009:  There was a new law in Utah that prohibits PII from being required too early in the hiring process.

The Unfair Use of Credit Reports and Criminal Records and the EEOC E-Race Initiative

By Jared Callahan, Employment Screening Resources

According to an article in HR Morning, the two biggest headaches for employers when it comes to hiring are the blanket  exclusion of individuals with poor credit histories or a criminal, record, and not showing a correlation between background checks and the job itself. 

The author notes that in response to seeing an increase in claims of discrimination based upon criminal records and credit reports,  the EEOC began the E-RACE Initiative (Eradicating Racism And Colorism from Employment).  This excellent article can be found at:

As ESR has advised employer on a number of occasion, the unfair use of credit reports or the automatic exclusion of individuals with criminal records without considering if there is a business justification are two big area of potential liability for employers.  The Safe Hiring Manuel, the first comprehensive book on background checks that was written by ESR goes into these issues in detail.  It can result in an action by the EEOC or a lawsuit for discrimination.  Needless to say, employers would rather not face either.  As noted in a recent ESR blog, the EEOC has brought a legal action against one national employer alleging the discriminatory use of credit reports and criminal records. 

The one thing that small and medium businesses do not want to do is to use screening software that makes automated decision.  That is a big risk taken for no good reason.  

To attempt to minimize exposure, employers may want review the following articles by ESR:


2010 Trend on more lawsuits including class action litigation over accuracy, privacy, and consumer rights

By Les Rosen, Employment Screening Resources

2010 Trends in Screening–Trend Two:

Employment Screening Resources (ESR), a leading national online employment screening background firm, is releasing the ESR “Third Annual Top Ten Trends in the Pre-Employment Background Screening Industry” for 2010.   This is the SECOND of the ten trends ESR will be tracking in 2010.  The ten trends will be released over the next three weeks:

2.  More lawsuits including class action litigation over accuracy, privacy, and consumer rights: 

News stories in 2009 blasted the screening industry for inaccurate reports, and it appears that lawsuits are on the rise and will continue in 2010.  It is not surprising, since screening has become a large industry, and enough people have been the subject of screening reports that the whole area has come to the attention of plaintiff’s lawyers.  In addition, 2009 saw class action lawsuits for violation of the procedures under the FCRA, and there is every reason to believe that screening firms and employers can expect more of the same.  The bottom line is that a Background Check is a highly legally regulated professional service, and it is important to ensure that a supplier of this service understands the legal framework and, further, approaches the screening process as a professional service, and not just as a data provider.

2010 Trend on Increased focus on whether credit reports and criminal records are discriminatory

By Les Rosen, Employment Screening Resources

2010 Trends in Screening–Trend One:

Employment Screening Resources (ESR), a leading national online employment screening background firm, is releasing the ESR “Third Annual Top Ten Trends in the Pre-Employment Background Screening Industry” for 2010. ESR has identified new trends that are starting to make a difference, as well as old trends that have evolved as the screening industry matures and as plaintiff’s attorneys, including class action lawyers, have started to focus on background checks. 

This is the first of the ten trends ESR will be tracking in 2010.  The ten trends will be released over the next three weeks:

  1. Increased focus on whether credit reports and criminal records are discriminatory: When the EEOC filed a lawsuit against a national employer in October 2009 alleging that credit reports and criminal records were being used to discriminate against members of protected groups, it did not come as much of a surprise to industry watchers.  (See ESR blog at:  There has been a steady drumbeat of concern about credit reports and criminal records.  Credit reports have come under increasing criticism as reported in the media for being inherently unfair and potentially discriminatory. California, for example, has twice passed laws that would have severely limited credit reports (although both were vetoed by the governor).  A bill has been introduced in Congress to amend the federal Fair Credit Reporting Act (FCRA) to outright prohibit the use of credit reports for employment, and it has 46 co-sponsors in the House of Representatives. In 2009, Hawaii passed a bill limiting credit reports.  (See past ESR blogs on the pros and cons of credit reports.) The use of criminal records is also getting scrutinized. New York in 2009 passed new laws to ensure that employers were not automatically rejecting applicants with criminal records without considering the individual on his/her merits.  In recent years, the Conference of Mayors has addressed the issue of criminal records baring ex-offenders from getting a second chance, and the State of Minnesota joined a number of large cities in adopting a “ban the box” approach to governmental employment , meaning that questions about a past criminal record are not requested initially on an employment application in order not to deter ex-offenders form even applying. On one hand, without exercising due diligence, firms can sued for negligent hiring, suffer financial loss, and/or put public safety at risk if “red flags” are not located. On the other hand, critics are concerned that with undue emphasis on credit reports or criminal records, people are being shut out of the workforce.  For instance, unless ex-offenders can get a job, there is a high likelihood of recidivism which means more taxpayer dollars are being spent on prisons instead of schools or hospitals.  The bottom-line is that screening occurs at the intersection between concerns over security and safety on one hand, and privacy and fairness on the other, and society is constantly defining the boundaries. Of course, it is interesting to note that nearly every time a legislator objects because there is too much screening, there is often a call by some other elected official for even more screening after it is revealed that some crime or offenses occurred where an inappropriate applicant was hired without a sufficient background check.  A listing of proposed legislation related to screening shows that legislators are both calling for increased privacy and protections for consumers at the same time they are introducing bills to increase background check requirements.  This underscores the fact the screening occurs at the intersection where privacy and security concerns meet, and the lines are constantly being tested. One area where employers need to review their practices is on using automated scoring matrixes where a candidate is given a green, orange, or red light.  That sort of automation where an individual is judged entirety by his/her membership in a particular category instead of his/her personal abilities is precisely the type of process that is likely to get some unwarranted attention in the courts as a discriminatory practice. This practice presents dangers to large employers and small and medium enterprises certainly should not be engaging in automated decision making based on background checks. 

Employment screening blog on applicant lies in top ten list in 2009 on major recruiting web site

A leading recruiting web site, RecruitingBlogs , has released its list of the ten most read blogs posted on its site for 2009.  RecruitingBlogs  is a network that is home to over 20,000 recruiters, HR Professionals and recruiting vendors. 

Employment Screening Resources is pleased to note that a blog posted by its president, Lester Rosen, was on the top ten list. 

The blog dealt with the six biggest applicant lies.  The blog was posted at: 

For the entire list, see: 

ESR will continue to update its blog at leat twice weekly to fulfill is mission of keeping employers, Human Resources and Security professionals  advised of trends, best practices and legal development.  The purpose of the ESR blog is to be the one place employers need to go to keep on top of critical safe hiring issues.  

Although ESR will at times comment on stories in the news that are relevant, ESR does not simply rehash new stories.  The majority of content on the ESR blog is original content written for employers, Human Resources and Security professionals.  Between the blogs, the whitepapers and resources, the ESR web site is a one source encyclopedia for hiring information.  ESR looks forward to continuing to serve its clients in 2010.

Employee Problems are Caused by Problem Employees

Question from the mailbox:  Is performing background checks worth the time and effort it takes?     

Answer:  For employers that do not perform background checks, one of the most frequently asked questions is why do it?  The short answer is that employee screening is one critical way to keep problem employees out of the workplace.  As any employer or human resources professional know, a great deal of time is spent dealing with employee problems. As Employment Screening Resources (ESR) advised  employers in the first edition of The Hiring Manual back in 2005, “problem employees usually cause employee problems.”  An employer is certainly ahead if they can try to minimize the problem employees in the first place. 

Of course, there is no perfect system to prevent bad hires.   Background checks alone are not going to keep an employer from hiring people they later regret having in the workforce.  The hiring process has a number of moving parts, but the background check is the critical final step. 

In addition, the cost if a background check will typically be less than the cost of that new employee on his or her first day on the job. That is pocket change compared to the damage one bad hire can cause. It is ironic that some firms will spend hours shopping for a computer bargain yet at the same time try to save money by not adequately checking out a job applicant, even though each hire  represents an enormous investment and potential risk.   

Nor is it difficult to set up a screening programming. Even for an overburdened HR, security, or risk management department already handling numerous tasks, outsourcing background screening can be done very quickly and effectively. ESR can set up the entire program, provide all the necessary forms in a short time and assist with legal compliance.

Defenses That Do and Do Not Work in Negligent Hiring Cases

If an employer is sued for negligent hiring on the basis that they hired someone that they either knew or in the exercise of reasonable care should have know was dangerous, unqualified, unfit or dishonest, and it was reasonably foreseeable that some of harm could occur, an employer can be sued for negligent hiring.  That is the opposite of due diligence.  If the subject of a legal action, employers do have some potential defenses in a court case, but they are far from a sure thing.

The best defense is that the employer did in fact exercise due diligence and reasonable care, but despite those best efforts, a bad hire fell through the cracks. An employer would have to show that they took a number of steps designed to avoid bad hires. An employer can review the adequacy of their hiring efforts by taking the safe hiring audit offered by ESR. See:

Another defense that had been successful is that the crime or injury was too remote or unconnected from the employer’s negligence, or was not foreseeable. An example is the California case ESR recently reviewed where a plumber with a criminal record was hired, meet a woman on the job that he started dating, was terminated by the employer and then murdered the girlfriend two years later. The victim’s family’s argued that but for the negligent hiring, the two would not have met in the first place and the murder would not have occurred. The court found that the murder two years later and long after termination was not sufficiently connected to the hiring to hold employer legally responsible. See:

Another defense that a background checks would have not have revealed anything anyway so that the employer’s failure to conduct an adequate pre-screening was not the cause of the injury.  As the old adage goes, “every dog has its first bite.”  If there was nothing for a background check to locate that was a potential a “Red Flag,” that is also a defense.

Some defenses that do not work? Employers have not been very successful in defending lawsuits on the basis that due diligence and background checks cost too much, especially considering how inexpensive it is to screen. Another argument that may not go far with a jury is that the employer did what every other employer did in their industry. The fact that all employers in an industry engage in the same practice does not mean that the employer has meet the legal duty of due diligence, since a “standard practice” is not the same as a “standard of care.” The least successful defense is the argument that the employer is also the victim as well, or that they were victimized by an applicant lying.

The bottom-line: Exercising due diligence in hiring and conducting background checks is a small price to pay to avoid the “Parade of Horribles” that can befall an employer that makes bad hiring decisions.

Employment Screening Guidelines Released by Foremost Security Association

The second edition of the ASIS International Preemployment Background Screening (PBS) Guideline has been released to the public. ASIS is the preeminent organization for security management professionals worldwide. According to the press release:

The guideline, designated ASIS GDL PBS-2009, is an educational and practical tool that organizations can use as a resource in understanding the reasons for preemployment background screening of job applicants, as well as the legal principles surrounding the issue of preemployment background screening. The PBS guideline can also assist in developing policies and procedures that will enhance an organization’s hiring policy.

ASIS and the National Association of Professional Background Screeners, in an effort to promote shared cooperative interests, collaborated in the revision of the 2006 version of the ASIS Preemployment Background Screening Guideline.

This PBS guideline presents practical information concerning the value of preemployment background screening, the importance of the application form, important legal issues and considerations (such as the Fair Credit Reporting Act, privacy issues, state laws, rules and regulations), the key elements of preemployment background screening, the types of information to utilize in verifying the key elements, the use of credit reporting agencies in preemployment background screening, and an appendix of a sample preemployment background screening flow chart.

A number of members of the National Association of Professional Background Screeners (NAPBS) joined together with security professionals to serve on the committee that updated the Guidelines. ESR is pleased to note that its president, Lester Rosen, had the privilege of serving with this outstanding group of dedicated professionals on the original committee as well as the committee that produced the second edition.

The Guideline is available on the ASIS web site at

Job Hunting and Credit Reports

For some reason, there are individuals and groups bent on scaring job applicants about credit reports by spreading miss-information that is just plain wrong.  Whether these people are just not well informed, or have their own agenda to push, the fact remains that job applicants are under enough stress without having to worry about things that are simply not true.

In previous blogs, ESR debunked two commonly held myths. See:

First, employers do NOT obtain your credit score if they order an employment credit report. Credit score has no relationship to job performance and is simply not provided to employers.  The reports do include a credit history, but not a credit score.

Secondly, employers are not running credit scores as some sort of insidious conspiracy deny jobs to applicants.  Employers only run credit reports AFTER an employer has gone through the time, cost and effort to find the right candidate, usually from a large field of applicants. An employer does not invest money in a background report just to find ways not to hire.  When an employer initiates a background check, it is because they are interested in hiring the applicant and are conducting due diligence to make sure there is no reason not to hire.

Another myth is that employers are running credit reports in large numbers on all applicants.  In fact, even though studies show a significant usage by employer of credit reports, they are not widely used on all applicants.  Most employers and Human Resources professionals understand that credit reports should be limited to those jobs where there is a business justification, such as positions with access to cash, assets or personal information or other sensitive positions.

What should a job applicant do regarding credit reports and job hunting?

First, understand that if you get to the point where an employer is running a background check, that is great news.  It means you made it though the hiring process and that you are most likely a finalist for a job.

It also means that the employer has spent considerable time recruiting, interviewing and making decisions, and that you rose to the top after the employer has reviewed lots of other resumes and applications.

Secondly, if you are concerned that a background check may include a credit report, do not be the last to know what your credit report may say.  As a consumer, you are entitled to a free credit report YEARLY from each of the credit bureaus.  A consumer just needs to go to to run a free report.  If you see some sort of error, it would be a good idea to get that corrected as soon as possible.  There is a well established procedure for contacting the credit bureaus to bring an error to their attention and request it be remedied.

Third, if you are concerned that your credit history may reflect negatively, than have a discussion ahead of time with the hiring manger or Human Resources about your credit reports.  As most experienced Human Resources professionals can tell you, information honestly disclosed by an applicant has much less impact than information the employer discovers for themselves.

Also keep in mind that HR professionals understands that people have to deal with the realities of life. For example if a consumer was undergoing economic stress due to the recession, and relied on credit cards, or there was a medical issue that caused bills, let HR or the hiring manager know.  Also keep in mind that the only reason you are having this discussion is that the firm is seriously considering hiring you, and has gone through allot of time and effort to make that decision, including reviewing numerous other resumes.

Fourth, applicants need to keep in mind that they have rights.  Under the federal Fair Credit Reporting Act (FCRA), a credit report is only obtained after the applicant has given consent and after a legally required disclosure on a standalone document has been given.  If the employer utilizes the credit report in any way not to hire, an applicant is entitled to a copy of their credit report, a pre- adverse action notice as well as a statement of their rights. Before any decision becomes final, the applicant also has the right to challenge the credit report before any denial of employment is made final.

The bottom-line:  If an employer feels a credit report is job related, and a consumer is concerned about that, keep in mind that the employer has made you a finalist, and therefore has an interest in hiring you.  You were evaluated without the employer having any idea of what was in the credit report.  If there are negative entries, be prepared to share it before the credit report is run. (ESR advises employers by the way not to utilize credit reports unless there is a clear business justification and the use is non-discriminatory and to take into account that credit reports can contain errors or material not relevant to employment.)

One other interesting point: there is no evidence that employers routinely engage in pulling back job offers after the review of the credit report.  There are certainly anecdotal stories, but on the whole, once an employer decides they want a particular person, and they have spent time and effort to make that decision, it usually takes something significant that was unexpected for an employer to change their minds.

International Background checks

Did you know?  Given the mobility of workers across international borders, an employer’s obligation of due diligence may no longer be limited to employment screening just in the United States. A 2000 government study shows that 11.5 percent of the population consists of immigrants, and an increasing number of workers have spent part of their professional careers abroad.

Employers cannot assume that the U.S. government has conducted background checks on workers who hold visas. Government checks appear to be aimed at reviewing watch lists rather than verifying past employment or education or checking criminal records for employment purposes.

Given these issues, employers should consider background screening internationally for criminal records, employment history, and education credentials. Standard background checks conducted in the United States do not include international employment and criminal records. One caveat is that international checks typically take longer and are more costly than domestic screening, but they can be worth it if they help a company limit its exposure to future liability. Another issue is data and  privacy protection issues. 

For more information, see:  ESR was the third U.S. background firm to be Safe Harbor certified for dealing with the European Union.  More information about international background checks is available in The Safe Hiring Manual.