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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May 2005 Vol. 5, No. 5

Employment Screening Resources (ESR) Newsletter and Legal Update

1. New FCRA Document Destruction Rules Effective June 1, 2005

2. Background Checks Surge

3. Law Firms See Dramatic Increase in Negligent Hiring Lawsuits

4. ESR Announcements and Seminars; Safe Hiring Training Video Released in DVD Format

1. New FCRA Document Destruction Rules Effective June 1, 2005

New federal rules go into effect June 1, 2005 regulating the disposal of consumer information obtained under the federal Fair Credit Reporting Act (FCRA). The new rules were mandated by 2003 amendments to the FCRA, called the FACT Act. The rules were issues by the Federal Trade commission, the federal agency that enforces the FCRA.

The new requirements are aimed at destruction of consumer information obtained from a Consumer Reporting Agency. Pre-employment background reports would be covered by the rule. The stated purpose of the rule is to, “reduce the risk of consumer fraud and related harm, including identity theft, created by improper disposal of consumer information.”

Under the new rule, any employer who disposes of a consumer report must take appropriate measures. If the report was on paper, the key is to dispose of it by shredding the documents. If a third-party document destruction firm is utilized an employer should exercise some due diligence in the selection of the firm. If the information is in electronic form, appropriate measures must be taken to prevent the information from being read or reconstructed. (How long an employer should retain consumer reports was covered in a previous ESR newsletter).

Although the new rules are very narrow in focus and apply only to consumer reports from third party firms, it does underscore an important employer consideration—responsible information handling by businesses is a key element in combating identity theft. Employers need to take appropriate measures to keep all confidential and identifiable consumer data safe, including proper disposal practices. Shredding is the best practice for confidential information that is being disposed.

For an excellent report on proper information handling practices for employers, see The Privacy Rights Clearinghouse publication Prevent Identity Theft with Responsible Information-Handling Practices in the Workplace See:

2. Background Checks Surge

According to a recent released statistic, the practice of conducting background checks is surging. The yearly ADP Employer Services Hiring Index found that background checks had risen 16% in 2004.

The study also demonstrates why employers are well advised to conduct these checks. The study found that:

Employment, education and or credential references: Fifty percent (50%) of checks conducted by ADP contained differences in information between what an applicant claimed and the facts obtained during the verification check

  1. Criminal records: Five percent (5%) of the records checked for criminal records located a record
  2. Driving records: Twenty-nine percent (29%) of applicants checked had one or more violations on their driving records.

Other studies have confirmed this trend. The increase has been fueled by a number of factors, including:

  • Highly publicized stories about sexual offenders abusing positions of trust in youth, charity or religious-based organizations
  • High profile cases of resume fraud, such as executives or coaches who fabricated credentials
  • The War on Terror and the events of 9/11leading to additional background checking rules
  • Highly publicized incidents of workplace violence, embezzlement and other workplace issues where an employer failed to perform a background check
  • Large jury verdicts in negligent hiring case where an employer’s failure to exercise due diligence resulted in grievous harm to children, co-workers, customers or innocent members of the public.

3. Law Firms See Dramatic Increase in Negligent Hiring Lawsuits

Fueling the increase in background screening has been an increase in negligent hiring lawsuits against employers. According to a news story recently posted on the Occupational Hazard website (, a major national US law firm reported there has been a dramatic increase in the number of lawsuits brought against employers for negligent hiring. The lawsuits sought damages against employers for hiring workers accused of criminal, violent or other wrongful conduct, including acts that occurred during non-working hours.

This is consistent with an in-depth article written for lawyers on how to litigate lawsuits against employers for the criminal acts of their employees that indicated these kinds of lawsuits are one the fastest growing areas of tort litigation. (29 Am Jur Trials, Sec. 1)

This trend of suing employers for the acts of their employees is likely fueled by the amount of workplace violence that exists in the US workplace. Figures from OSHA suggest that every year, approximately two million Americans are victimized by some form of workplace violence, from verbal threats, to physical assaults and even homicides.

For more information on background checks, please contact Jared Callahan at 415-898-0044 or by e-mail at [email protected]

4. ESR Announcements and Seminars; Safe Hiring Training Video Released in DVD Format

  • The Safe Hiring training video featuring ESR President Les Rosen has just been released in a DVD format. The 23 minute training tape, produced by nationally recognized Kantola Productions, follows the fictional story of a company that makes a bad hire and discovers the steps to put in place to ensure it doesn’t happen again. As the story unfolds, Les explains the details of an effective safe hiring process, and sheds light on the legal background that employers need to know. See:
  • Employment Screening Resources (ESR), and Facts on Demand Press announced on April 8, 2005 the release of an updated and revised edition of “The Safe Hiring Manual—The Complete Guide to Keeping Criminals, Terrorists and Imposters Out Of Your Workplace,” by Lester S. Rosen, president of ESR

    The new version contains updated information stemming from amendments to the federal Fair Credit Reporting Act (FCRA) in 2003, as well as new information about international background checks, legal decisions affecting an employer’s duty of due diligence, and new studies and statistics on the dangers of hiring without adequate pre-employment screening.

    A comprehensive blueprint for developing a program to hire safe and qualified employees, “The Safe Hiring Manual” is written for employers, human resource departments, security professionals, staffing vendors, private investigators, and labor lawyers. The 512-page book details how to exercise due diligence throughout the hiring process, significantly increasing an employer’s chance of avoiding the financial and legal nightmares of even one bad hiring decision. It is available from, Borders, Barnes and Noble and numerous other bookstores.

  • See the new ESR free Interview Generator tool for employers. It is available at The Interview Generator helps employers to create customized question sets that can be printed out and used during an interview. An employer can also create sets of questions for each position, choosing from general sample questions listed or generating their own questions. Each interview set can be saved in WORD and can be customized by each employer. Using a “structured interview” helps employers ask permissible questions in a consistent fashion for all applicants for a particular position. An employer should only choose those questions that are valid predictors of job performance for a particular position.

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

November 13, 2005 –Tampa, FL National Conference of Background Screening Firms- “Legal Update– What Every Background Firm Needs To Know About the FCRA and Laws Effecting Pre-Employment Screening.” (intended for background firms and record retrievers)

October 27, 2005–Dallas/Ft. Worth, TX —“Human Resources, Homeland Security and the War on Terrorism” 2005 HR Southwest Human Resources Conference and Exposition.

October 6, 2005 –Long Beach, CA “Criminals, Imposters and Hiring – Legal and Effective Background Screening.” 48th Annual Professionals in Human Resources Association (PIHRA) Annual Conference. ( Workshop–2 1/2 hours

September 29, 2005–Milwaukee, WI– ” Criminals, Imposters and HR—The Legal and Effective Use of Criminal Records and Background Checks in the Hiring Process.” 19th Annual Wisconsin SHRM State Conference.

September 23/24, 2005 –Baltimore, MD “What Every Recruiter and Staffing Professional Needs to Know About Background Checks, Negligent Hiring and Keeping Criminals and Imposters from Putting Them out of Business.” The National Association of Personnel Services (NAPS) Annual Conference.

September 22, 2005 –Orlando, FL “Avoid Hiring Criminals, Terrorists and Imposters” 2005 National Safety Council Congress.

September 12, 2005 –Orlando, FL “Pre-Employment Background Screening–How to Keep Criminals, Terrorists and Imposters Out of Your Workplace” ASIS International 51st Annual Seminar and Exhibits, Monday, September 12, 2005 at 1:30 PM.

June 16, 2005 — Kennedy Information Audio Conference on “Background Checks and Recruiting — Avoiding the Disaster of a Bad Hire. Additional information to be posted on

June 8, 2005--Riverside, CA “Diligence in Selecting Staff, Volunteers and Mentors.” 9th Annual Inland Empire Nonprofit Conference.

May 18, 2005-San Mateo, CA ” Criminals, Imposters and HR—The Legal and Effective Use of Criminal Records and Background Checks in the Hiring Process.” San Mateo County EAC Lunch meeting.

Contact ESR for further details.

Employment Screening Resources (ESR)

1620 Grant Avenue, Suite 7

Novato, CA 94945


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