An opinion issued by the U.S. District Court in Northern District of Illinois in 2003 provides a case study on what an employer and screening firm should NOT do when it comes to employment background checks.

According to the allegations filed in the case, the plaintiff was contacted by a major hotel and offered a position. On his first day, he completed several forms, including an employment application where he truthfully stated he had no criminal record.

The application contained an authorization for a background check that the plaintiff did not initial. There was no indication in the court’s opinion that any separate disclosure was signed as required by the FCRA.

After employment began, the major hotel had a background screening firm to do a background check. The screening firm mistakenly reported that the plaintiff had been convicted of a misdemeanor and served six months in jail. According to the court opinion, the plaintiff in fact did NOT have a criminal conviction. Neither the major hotel nor the background firm investigated the denial, and the plaintiff was terminated. To make matters worse, the plaintiff alleged that after he was fired the major hotel told third parties that he was fired because he lied on his application and spent time in jail. The plaintiff eventually found a new job, but at a substantially lower compensation.

Assuming for educational purposes all these facts were true (keeping in mind that allegations are not proof) , how many mistakes did the major hotel and the background firm make? Here are some of them:

  • Failed to provide a separate Disclosure for the background check under the FCRA.
  • Failed to comply with the adverse action rules under the FCRA. If the consumer applicant had the chance to explain, it could all have been cleared up.
  • Failed to re-investigate when told information was wrong.
  • Although the reasons for the mistaken criminal records are not clear, the question arises if reasonable procedures were used in obtaining the background data. 

The allegations in this case demonstrates the importance of understanding the legal requirements for a screening program.  To determine if an employer is legally compliant, contact ESR for an audit of your program, or see the book ‘The  Safe Hiring Audit’ at  Also, see an article by ESR called, The FCRA in Four Easy Steps for Employers at

To determine if your current screening firm knows what they are doing, do a vendor audit using: