Tag Archives: Best Practices

Adverse Action Letters under the Fair Credit Reporting Act (FCRA) and Employment Screening Background Checks

By Lester Rosen, ESR President

From the ESR mail box:

Here is a frequently asked question dealing with the federal Fair Credit Reporting Act (FCRA) and the pre-adverse and post-adverse action notices.  Suppose an employer has two finalists for one position. The employer submits both names for background checks and both candidates have clear background reports.  The firm then decides to offer the job to one candidate over the other, purely based upon the belief that one candidate was a better fit than the other, with nothing to do with the background reports.

Question: Should the employer still send the adverse action notices (both pre and post notices) to the rejected job candidate, even though the rejected candidate’s background report played no part in the hiring decision?

Answer:  Although Employment Screening Resources (ESR) cannot give legal advice, ESR can give a very lawyer-like answer, which is: It depends.

Assuming the screening report is 100% not related to the decision, and it was entirely a fit issue, then theoretically an employer can bypass adverse action.  Technically, adverse action notices are required only where a background report played a role, in whole or in part, in the employment decision.  The idea is to give an applicant a meaningful opportunity to review, reflect, and act upon a report if the applicant feels it is incorrect or incomplete in any fashion.

Even if the background report played just a minimal part in the final decision, the adverse action notices would be required.  However, if the employer merely decided to screen both finalists, and found nothing in the screening report that impacted the final decision, then strictly speaking the adverse action notices would not be required.

However, as with most things involving employment decisions and background checks, nothing is ever that cut and dried.  Here are some of the possible complications:

  • The first issue is proof.  The rejected applicant may claim that the fit argument was a pretext.  This is especially risky if the candidate not hired is a member of a protected class and argues failure to hire due to discrimination.  Invariable, the attorney for the plaintiff that chooses to sue would probably add on a cause of action for failure to follow the FCRA by not giving the rejected applicant a chance to correct a report. Plaintiff lawyers have become very sophisticated in their understanding of the FCRA, and employers and screening firms that violate it can well be targets of litigation. 
  • In addition, the subject of what is adverse can be tricky.  Even if there is nothing derogatory on the face of the report, the rejected applicant can still claim that the report gave the wrong impression. For example, a job title may have been reported that was different than the applicant used. Another example is a credit report if it was run as part of the background check.  If the credit report came back and there here was nothing derogatory such as late payments, there still could still be information that was incorrect.  For example, some employers look to see how much debt an applicant is in and compare their monthly obligations to their salary. If the reported debt information was incorrect, the applicant can argue he/she was placed in a false light without a chance to correct it.
  • Another problem is consistent administration of the adverse action rules.  If an employer starts picking and choosing when to send or not send notices, an error can be made in other cases, since it can be a judgment call to a certain extent as to whether there was anything negative that influenced the decision.  Some employers choose to send the notice to any rejected applicant that was the subject of a background report and not hired to ensure full compliance. After all, employers usually only submit background check requests generally on finalists so the situation may not come up that often.

The bottom line is always risk management, and many employers decide to follow a consistent policy of always sending out adverse action notices, even if not strictly required, so nothing falls though the cracks and they don’t need to justify anything later.  Providing adverse action notices are a quick clerical task that takes little time.  If for some reason the lack of notices becomes an issue in employment related litigation, it may be hard to convince a jury that in fact the report was 100% irrelevant to the decision. 

If for some reason, there is a particular case where an employer does not want to send out the adverse action notices, then the employer may want to prepare a memo to file clarifying that it was a fit issue only and the screening report was not involved even one iota.

For more information on adverse action client letters, including suggested langue, see the ESR Special Report, The FCRA in Four Easy Steps,  at: http://www.esrcheck.com/articles/Complying-with-the-Fair-Credit-Reporting-Act.php.

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

New Case from New York Gives Potential Guidance on Issue of Which State Law Applies for Reporting Criminal Records

An ongoing issue for employers and background screening firms is the question of what law applies when a criminal record is found in one state impacts an employment decision in another state.  Since state reporting laws can vary widely, employers and screening firms are sometimes left without clear guidance if a criminal record can be reported or utilized because it is not clear which state law to apply. Continue reading

Employment Screening Expert Lester Rosen to Present Session on Background Checks at SHRM Annual Conference

By ESR News Staff

Employment Screening Expert Lester Rosen, President of Employment Screening Resources (ESR), a leading employment screening firm headquartered in the San Francisco area, will present a session on background checks at the SHRM Annual Conference and Exhibition on June 30, 2010, in San Diego, California.

The annual event — the world’s largest human resources conference — is sponsored by the world’s largest human resources association, the Society for Human Resources Management (SHRM), and features top HR and business experts sharing their perspectives, strategies, tools, and tips for growing a company’s talent.

The session to be presented by Rosen — Negligent Hiring and Background Checks: Best Practices and Legal Compliance — will help human resources professionals avoid employee problems by identifying potentially problematic applicants through legally complaint due diligence tools.  The session addresses new trends and legal challenges facing employers, and will also cover issues such as the use of social networking sites, international background checks, and concerns over the use of credit reports and criminal records.

“I am very pleased to have the opportunity to review cutting-edge applicant selection topics that can help employers select the best candidates,” commented Rosen. “Exercising due diligence and staying out of court is mission critical for businesses of all sizes, and this presentation is aimed at identifying for  employers and recruiters the latest trends, tools, and legal developments.”

Rosen, a nationally recognized expert on employment screening background checks, is a writer and speaker on the Fair Credit Reporting Act (FCRA), pre-employment screening, and safe hiring issues. In addition, Rosen authored the first comprehensive book on employment screening — The Safe Hiring Manual: The Complete Guide to Keeping Criminals, Imposters, and Terrorists Out of Your Workplace — and also wrote The Safe Hiring Audit.

In addition, Rosen was the chairperson of the steering committee that founded the National Association of Professional Background Screeners (NAPBS), the professional trade organization for the employment screening industry, and served as its first co-chairman in 2004.

For more information about the SHRM Annual Conference and Exhibition, visit http://annual.shrm.org/. For more information about background checks and employment screening, visit Employment Screening Resources (ESR) at www.ESRcheck.com.

Sources:

http://sanfrancisco.dbusinessnews.com/shownews.php?newsid=212110&type_news=latest

http://annual.shrm.org/

New Case Demonstrates How the Details are Everything if Taking Adverse Action on a Current Employee Due to a Background Check

A new federal district court case demonstrates the importance of handling the adverse action process correctly when terminating an existing employee due to an unsatisfactory background check.

In the case decided on February 26, 2010 by the U.S. District Court for the Southern District of Ohio (2010 U.S. Dist. LEXIS 17373), an employer ran a credit check on all employees in the accounting department, including the plaintiff who had been working in the current location for seven years. For reasons not disclosed in the case, the employer decided to terminate the plaintiff due to the result of the credit report. Continue reading

CAUSE Shows Background Checks Needed To Uncover Unsafe Service Employees Working In Homes

When a hired worker enters your home to perform a service that you requested, do you know to whom you are opening your door?

So asks an article on HuffingtonPost.com — ‘Could You or a Loved One End Up Like Elizabeth Smart?’ — that shows why background checks are needed to uncover unsafe employees working in and around homes of other people, and how background checks can help people avoid tragedies like the one experienced by Lucia Bone, the founder of ‘Sue Weaver CAUSE’ Consumer Awareness of Unsafe Service Employment.’

The article title references the case of Elizabeth Smart, whose father hired a contract day-worker who then later returned to the house to kidnap Elizabeth. The girl survived the ordeal, but Sue Weaver, Lucia Bone’s sister, was not so fortunate even though the worker who entered her home was hired by a large company.

In 2001, according to the article, Weaver was raped and beaten to death in her Florida home. Six months before her death, Weaver had contracted with a major department store to clean the air ducts in her home. Both workers sent to her house had criminal records. One was a twice-convicted sex offender on parole who — like the worker in the Smart case — returned to a home where he had once worked to commit a crime.

Sadly, the article reports Weaver’s murder is not an isolated case, since many consumers are robbed, assaulted, and murdered each year by workers with jobs that allow them access into homes. Because of this, Bone started Sue Weaver CAUSE to both honor her sister and to fight for standardized background checks of all in-home service employees. Through consumer awareness and legislation, Bone wants to ensure that big, reputable retail companies like Sears, Best Buy, Home Depot, Lowes, and others perform thorough criminal background checks on the contractors and sub-contractors they send into homes.

Since there are currently no federal or state laws requiring companies to do criminal background checks on contractors or sub-contract workers sent into homes, Sue Weaver CAUSE is demanding legislation for CAUSE Certification compliance. When interviewed for the article, Bone says the CAUSE Certification would require annual background checks following CAUSE minimum screening standards on all employees, contractors, and subcontractors. Bone adds that these standards were determined from survey results from questions asking background screening professionals what minimum screening should be conducted on workers going into homes of elderly mothers, pregnant wives, and people with special needs.

According to Bone, the minimum requirements for CAUSE Certification are:

  • Social Security Number (SSN) Address Trace;
  • County-Level Criminal Check (Search records for past seven years in counties where applicant lived, worked, or attended school);
  • Multi-jurisdictional/”National” Criminal Database, and;
  • National/State Sex Offender Registry.

In addition, Bone says consumers “never think about (criminal background checks for in-home service workers)” and automatically assume the company they hire would not send criminals into their homes. She advises consumers to be proactive and not assume companies properly screen workers sent to homes. “Bonded and insured is not a background check.”

The Sue Weaver CAUSE website is located at: http://www.sueweavercause.org/.

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

Source: http://www.huffingtonpost.com/janet-kinosian/could-you-or-a-loved-one_b_559526.html

Background Check Expert Lester Rosen Presents Webinar on How Social Media Use During Employment Screening Can Trigger Privacy Lawsuits

By Les Rosen, Employment Screening Resources

Lester Rosen, President of Employment Screening Resources (ESR), a leading international employment screening background check firm headquartered in the San Francisco area, will present a national webinar for a leading business information site on employment screening on Thursday, April 22, 2010 at 2:00 PM EST / 11:00 AM PST.

The webinar — How Social Media and Traditional Background Checks Trigger Privacy Lawsuits — is being presented by Business 21 Publishing, which provides multi-media corporate learning and employee training products. Participants in this 60-minute webinar will learn best practices to help screen employees thoroughly without violating the law.

In the webinar, Rosen — a nationally recognized expert on employment screening background checks — will address such topics as:

  • The pros and cons of using social media internet sites such as Facebook, MySpace, and Twitter and how privacy and discrimination laws apply.
  • What employers should do when they discover that a job candidate has a criminal record, a bad credit report or some other red flag.
  • The Title VII implications of background checks and credit reports.
  • The legal requirements under the Fair Credit Reporting Act (FCRA) and how state to state privacy laws also apply.
  • The legal risks associated with “one button” automated background check systems.
  • What applicants need to sign before and after the background check is complete.
  • How employers should deal with independent contractors or temporary workers.
  • Considerations when conducting International background checks.

“Hiring safe, qualified, and honest employees is mission critical for any business, and I am pleased to have the opportunity to help employers avoid the risks of a bad hire,” commented Rosen. “Recruiters and hiring managers also need to understand the potential liabilities that employers can face if employment screening is done incorrectly or unfairly as well.”

Mr. Rosen, who is also an attorney, is a writer and speaker on the Fair Credit Reporting Act (FCRA), pre-employment screening, and safe hiring issues. In addition, he is the author of the first comprehensive book on employment screening — “The Safe Hiring Manual: The Complete Guide to Keeping Criminals, Imposters, and Terrorists Out of Your Workplace” — and also wrote an additional guide on the subject called “The Safe Hiring Audit.”

Mr. Rosen’s speaking appearances have included numerous national and statewide conferences. He has testified in the California, Florida, and Arkansas Superior Court as an expert witness on issues surrounding safe hiring and due diligence. Mr. Rosen was also the chairperson of the steering committee that founded the National Association of Professional Background Screeners (NAPBS), the professional trade organization for the screening industry, and served as the first co-chairman in 2004.

For more information about the webinar How Social Media and Traditional Background Checks Trigger Privacy Lawsuits, please visit: http://www.b21pubs.com/p-892-how-social-media-and-traditional-background-checks-trigger-privacy-lawsuits.aspx. More information about Employment Screening Resources (ESR) can be found at www.ESRcheck.com.

Source: http://www.b21pubs.com/p-892-how-social-media-and-traditional-background-checks-trigger-privacy-lawsuits.aspx

Discrimination Lawsuit Shows Importance of Employer Policy on the Use of Criminal Records During Background Checks

By Thomas Ahearn, ESR Staff Writer

A recently filed class action lawsuit “ which alleges that one of the largest management consulting firms in the world conducted background checks that discriminated against African-Americans and Latinos“ underscores the importance of employers understanding the U.S. Equal Employment Opportunity Commission (EEOC) policy regarding the use of criminal records during the pre-employment background check process.

According to a story on CNNMoney.com, the lawsuit accuses the firm of violating Title VII of the Civil Rights Act of 1964 by rejecting or firing qualified individuals who have criminal records even when the criminal history has no bearing on the individual’s fitness or ability to perform the job in question. CNNMoney.com reports that the lawsuit alleges the plaintiff had worked as a contract employee for more than a year when, in April 2007, the firm offered him permanent employment. This job offer was then withdrawn “ and the plaintiff’s employment as a contract worker terminated” after the results of a background check revealed that he had been convicted of vehicular homicide after driving while intoxicated a decade earlier.

The worker filed a Charge of Discrimination with the EEOC in November 2007 and the EEOC issued a “right to sue” letter to him on January 2010. The lawsuit, according to CNNMoney.com, seeks to force changes in the management consulting firm’s hiring and retention policies, practices, and programs, restore the worker and others like him to their positions at the company, front and/or back pay and benefits, and litigation costs.

Leading national online background check firm Employment Screening Resources (ESR) targeted the use of criminal reports in its recently released third annual Top Ten Trends in the Pre-Employment Background Screening Industry for 2010 that identifies new trends making a difference such as attorneys, including class action lawyers, focusing more on background checks and old trends evolving as the screening industry matures.

The first of the “Top 10 Trends” ESR will track closely in 2010 concerns the increased focus on whether both credit reports and criminal records promote discrimination. In October 2009, the EEOC filed a lawsuit against a national employer alleging that credit reports and criminal records were being used to discriminate against members of protected groups.

These recent actions should not come as much of a surprise to the background check industry, according to ESR, as there has been a steady drumbeat of concern about both credit reports and criminal records.  While the use of credit reports during background checks has been in the headlines recently due to the damage the economic downturn has done to the credit rating and finances of many job applicants, the use of criminal records during background checks is also coming under closer scrutiny. In 2009, New York passed new laws to ensure that employers were not automatically rejecting applicants with criminal records without considering the individual on their merits.

ESR believe this lawsuit clearly shows why employers should be familiar with discrimination and the critical “No Automatic Disqualification Rule”  when it comes to the use of criminal records during background checks. This rule states that employers cannot deny employment automatically but need a business justification not to hire based upon criminal records. 

The EEOC has made it clear the automatic use of a criminal record without showing a “business necessity” can have discriminatory impact by disqualifying a disproportionate number of members of minority groups. The EEOC’s position when it comes to the use of criminal records: an employer’s policy or practice of excluding from employment on the basis of their conviction records has an adverse impact on Blacks and Hispanics in light of statistics showing that they are convicted at a rate disproportionately greater than their representation in the population. Consequently, the Commission has held and continues to hold that such a policy or practice is unlawful under Title VII (the Equal Employment Opportunity law) in the absence of a justifying business necessity.

According to the EEOC, employers must show that it considered these three factors to determine whether its decision was justified by business necessity:

  • The nature and gravity of the offense or offenses;
  • The time that has passed since the conviction and/or completion of the sentence, and;
  • The nature of the job held or sought.

In other words, employers cannot simply follow a “No one with a criminal record need apply” strategy that statistically could end up having an unfair or discriminatory impact on certain groups of people. Instead, if an applicant has a criminal record, ESR suggests that the employer determine if there is a rational, job-related reason why that person is unfit for that job.  Employer must show that the consideration of the applicant’s criminal record is job-related and consistent with business necessity.

One area ESR think employers need to review their practices is with regards to using automated pass/fail scoring matrixes where job candidates are given a green (pass) light or red (fail) light.  That sort of automation where individuals are judged entirety by their membership in a particular category instead of their 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 employers  both large and small  and they should not be engaging in automated decision making based on background checks. The final say should be left in the hands of human beings.

As a general rule, ESR believes it is a best practice for employers to have written policies on important issues such as possible discrimination through the use of criminal records during background checks. Without such a policy, an employer’s actions in denying employment may become harder to defend, and having no policy also subjects an employer to claims of a discriminatory practice.

Sources:

http://www.esrcheck.com/2010-trends-backgroundscreening-industry.phphttp://www.esrcheck.com/wordpress/1057/new-eeoc-lawsuit-for-discrimination-based-on-credit-report-and-criminal-records

http://money.cnn.com/news/newsfeeds/articles/prnewswire/DA83387.htm

Employment Screening Resources Announces Free Employer Background Check Tools

By Jared Callahan, Employment Screening Resources

Employment Screening Resources (ESR), a leading national employment screening firm based in the San Francisco area, announced today that free tools available at the ESR Resources Center to help employers hire safe, honest, and qualified applicants.

The ESR Resources Center provides employers with “All Things Background Checks.”   Employers can find among other tools:

  • A free web based interview guide generator to help employers build printed interview forms for any position. The tool allows employers to select from generic interview questions, or to create their own questions, and then create a printed form that can be saved or modified in order to conduct structured and consistent interviews.
  • The tools necessary for an employer to determine if a school is legitimate or a diploma mill.
  • An internal safe hiring audit that employers can use to measure the effectiveness of their hiring programs.
  • A summary of the letters issued by the Federal Trade Commission (FTC) that interprets federal law controlling background checks. 

The features are part of a commitment to provide a centralized location for employers to keep current on the critical task of hiring a workforce that is safe, qualified, and honest.  The site also allows Employers, Human Resources Leaders, Security Professionals, Recruiters, and Job Applicants to locate resources on employee screening in one place and to keep current on evolving issues affecting hiring.

Employment Screening Resources (ESR) is the firm that literally wrote the book on background checks, The Safe Hiring Manual, and provides pre-employment screening services and drug testing internationally.  The firm specializes in legal compliance expertise and industry leading technology, service, accuracy, and turnaround.

“Background screening is a critical part of the process in identifying the best employees and with these tools on the ESR Resource Center, employers are empowered to select the best candidates,” commented Jared Callahan, Director of Marketing, and a national speaker on topics related to safe hiring.  “We are very pleased to have the opportunity to provide these free tools to employers and consumers.” 

About Employment Screening Resources: Employment Screening Resources (ESR)  is a safe hiring partner and provides REAL background checks, not cheap database shortcuts or off-shoring that endangers privacy. ESR specializes in legal compliance and provides industry leading technology, service, accuracy, and turnaround.  For additional information, contact Jared Callahan by calling 415-898-0044 or emailing jcallahan@ESRcheck.com.

California Case Protects Constitutional Right of Background Screening Firm to Report Sex Offender Registration

A California Court of Appeals decision filed March 23, 2010 held that a background screening firm has a constitutional right to report that an applicant has appeared on the Megan’s Law website (MLW) as a registered sex offender.  The Court further held that under the California law, the prohibition on the use of such information for employment does not apply where there is a person at risk. Continue reading

What does an employer do if the applicant lies or fakes their education, but it was not a job requirement

By Les Rosen, Employment Screening Resources

From the Employment Screening Resources mailbox:  We had an applicant for a job that did not require a degree.  However, the applicant listed a degree but it turns out he in fact never graduated and never earned the degree.   Can we consider that even though the job did not require a diploma?

Answer:   Generally speaking, if an applicant in dishonest in the hiring process, there is evidence to suggest that person may well be dishonest once in the job.  The dishonesty can be either making a  material omission or a material misstatement of  fact.  Dishonesty is typically a valid reason not to hire. The applicant put down a fake qualification on the application for the employer to consider, and the employer may well take that as act of dishonestly.  The applicant can hardly complain that they are the subject of discrimination,  since dishonest people are not a protected class.

In addition, even though a degree was not required, the  applicant obviously listed the degree to gain an advantage in the hiring process.

However, in this situation, the applicant was dishonest about something that was not a requirement of the job.  Although an employer may well still be on solid ground in not hiring someone  that was dishonest, going forward, a employer may consider two changes to their application to ensure there is no gray area when it comes to being honest in the employment application.

First, an employer should consider including the following language on the employment application where questions about education is asked:

Please list all degrees or educational accomplishments that you wish to be considered by the employer in the employment decision.

This statement has the advantage of putting the burden on the applicant to determine if they want to report a degree or educational accomplishment. The applicant is on notice that any degree they report can be used by the employer for the employment decision. If the applicant chooses to report a worthless degree, or a degree not earned, they can hardly complain if an employer uses that to deny employment, even if the degree was not a requirement of the job.

Secondly, an employer may consider adding the following type of language to their application if not already there:

The information provided by the applicant is true and correct, and that any misstatements or omission of material facts in the application or the hiring process may result in discontinuing of the hiring process or termination of employment, no matter when discovered.

This language in general protects an employer if an applicant is dishonest, even if the information comes to light after the person is hired.

Often times, the key to a successful hire is a well written employment application.  For more information on this and other topics, see: The Safe Hiring Manaul.