This newsletter is sent to clients of Employment Screening Resources (ESR), as well as employers, Human Resources and Security professionals, and law firms who require information on pre-employment screening, safe hiring, the FCRA and legal compliance. If this was sent in error, you can be removed from this mailing by using the “remove” feature at the end of the newsletter.

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February 2005 Vol. 5, No. 2

Employment Screening Resources (ESR) Newsletter and Legal Update

1. New FCRA Forms Now in Effect

2. New Court Case Shows Once Again, California is Different

3. 2005 Identity Theft Survey Shows Problem Continues

4. ESR Seminars

1. New FCRA Forms Now in Effect

As reported in the December, 2004 ESR newsletter, the Federal Trade Commission (FTC), the agency charged with enforcing the Fair Credit Reporting Act (FCRA), released new versions of certain notices that must be provided to consumers and employers effective a January 31, 2005.

The FCRA is the federal law that regulated pre-employment screening. Under the FCRA, a background screening firm must provide certain notices to employers and a summary of rights for use by consumers. Congress amended the FCRA with the passing of the FACT Act in 2003, which required changes in these notices.

Any employer engaged in employment screening needs to ensure that the screening firm is utilizing the new forms. For ESR clients, the form for consumers called, “A Summary of Your Rights,” has been in use since January and is attached to all ESR reports. A copy of the form can be found at:

The official publication mandated for use as of January 31, 2005 that all Pre-employment agencies should provide to employers is the “Notice to Users of Consumer Reports Obligations of Users under the FCRA.”

For any questions about the new summaries, contact Jared Callahan at 415-898-0044 or [email protected]

2. New Court Case Shows Once Again, California is Different

Hot of the press: A new California case filed on January 31, 2005 demonstrates once again why employers need to pay attention to state laws, particularly in California.

An employee sued an employer (who happened to be a law firm) for violation of the California Investigative Consumer Reporting Agencies Act (ICRA), the California version of the federal FCRA. The employee was a paralegal for the law firm. After being hired, a person at the firm did some investigation and discovered the new employee had a criminal record. The internal investigation lead to termination. The terminated employee filed a lawsuit, claiming, among other things, that the employer had violated California ICRA by not providing copies of public records it obtained in a timely manner.

California was the first state in the US to impose FCRA type requirements on employers who do their own in-house employee screening. Under the California ICRA, an employer who conducts their own investigation without utilizing a screening firm has certain obligations that are similar to FCRA obligations. An employer that conducts a do-it-yourself investigation must provide a copy of any public records to an employee within seven days, unless an applicant has checked a box to waive that right. However, if the employer uses the information to take an “adverse” action against the employee, the negative public records must be provided regardless of any waiver. The one exception to this is that if an investigation is conducted for suspicion of wrongdoing or misconduct, the documentation can be withheld until the investigation is complete. See California Civil Code section 1786.53.

In the Moran case, the employer provided the documents on the eighth business day, instead of seven calendar days. However, the court ruled that in the case of an investigation for wrongdoing or misconduct, the employer must provide the documents in a reasonable time, and not necessarily within seven days.

See: Moran v. Murtaugh, Miller, Meyer and Nelson, LLP (05 C.D.O.S 964 –January 31, 2005)

Walkaway Points: This case has several valuable lessons for employers:

Even though the FCRA regulates only the activities of third party screening firms, California has extended applicant protection to employers who practice do-it-yourself investigations.

If the employer had done some basic pre-employment screening before hiring the employee, the entire situation and the lawsuit may have been avoided.

In doing pre-employment screening, it is critical to consider state laws in addition to federal law.

Special note: ESR President Les Rosen helped to draft Civil Code Section 1786.53 in 2002 and is currently involved in efforts to further clarify that section of law.

3. 2005 Identity Theft Survey Shows Problem Continues

On February 1, 2005, the Federal Trade Commission released its annual report detailing consumer complaints about identity theft and the top 10 categories of fraud-related complaints filed with the FTC in 2004. According to the FTC press release, identity theft topped the list of complaints for the fifth year in a row, accounting for 39 percent of the 635,173 consumer fraud complaints filed with the agency last year.

The top ten areas experiencing consumer complaints for identity theft were:

1 Phoenix-Mesa-Scottsdale, AZ

2 Riverside-San Bernardino-Ontario, CA

3 Las Vegas-Paradise, NV

4 Dallas-Fort Worth-Arlington, TX

5 Houston-Baytown-Sugar Land, TX

6 Los Angeles-Long Beach-Santa Ana, CA

7 Miami-Fort Lauderdale-Miami Beach, FL

8 San Antonio, TX

9 San Francisco-Oakland-Fremont, CA

The full report is available at:

For employers, this underscores two important points:

1. Employment screening can be an extremely helpful tool to prevent someone with a false or stolen identity from applying to your place of work.

2. Given the concern over identity theft, employers need to take steps to safeguard the confidential data concerning their employees and customers at the workplace. For example, background screening reports should be kept safe and secure. The use of a paperless system, such as the ESRnet system can also help.

The Privacy Rights Clearinghouse has prepared an excellent self-audit tool for businesses on how effectively an organization is safe guarding information. See the “Checklist of Responsible Information-Handling Practices.”

4. ESR Seminars

  • ESR is pleased to announce the publication of the first definitive book on pre-employment screening and safe hiring. The book, The Safe Hiring Manual-the Complete Guide to Keeping Criminals, Terrorists and Imposters Out of Your Workplace, is by ESR President Lester S. Rosen. The 512 pages cover pre-employment background checks and safe hiring. It is available from, Borders, Barnes and Noble and numerous other bookstores.

ESR will be participating in the following seminars across the United States.

April 25, 2005–Little Rock, AR “Background Screening and Higher Education: Special Issues involving Background Screening and Due Diligence in the Educational Environment.” Annual Conference for the Southwest Region for the College and University Professional Association for Human Resources (CUPA-HR). CUPA HR

April 21 and 22, 2005–Dallas, TX “Criminals, Imposters and Recruiting – The Role of Pre-employment Screening in the Hiring Process.” SRHM 36th Annual Employment Management Association Conference and Exposition (EMA website).

March 3, 2005–Aptos, CA “Are You Ready to Hire?” Things are starting to look up, so come in for a tune-up. This half-day seminar will cover everything you need to know in order to hire successfully! Speakers: Janett Spirer, Humanex, Inc. and Les Rosen, Employment Screening Resources (ESR). Sponsored by the Santa Cruz EAC-Aptos Seascape Golf Club event room.

February 23, 2005–San Francisco, CA “Keeping Imposters and Criminals Out of the Workplace–An Introduction to Safe Hiring and Pre-employment Screening in California.” (A three hour workshop for HR professionals and employers sponsored by the NCHRA–

Contact ESR for further details.

Employment Screening Resources (ESR)

1620 Grant Avenue, Suite 7

Novato, CA 94945


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