pre emppyloyment backgground screeningg: latest...

Presenting a live 90‐minute webinar with interactive Q&A

Pre‐Employment Background Screening: p y g gLatest DevelopmentsStructuring Policies to Comply With Title VII, Fair Credit Reporting Act and State Laws

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, JULY 2, 2013

Today’s faculty features:

Pamela Q. Devata, Partner, Seyfarth Shaw, Chicago

Cindy D. Hanson, Partner, Kilpatrick Townsend & Stockton, Atlanta

Lester S. Rosen, Founder, President and CEO, Employment Screening Resources (ESR), Novato, Calif.Lester S. Rosen, Founder, President and CEO, Employment Screening Resources (ESR), Novato, Calif.

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P l Q D tPamela Q. DevataSEYFARTH SHAW LLP131 South Dearborn Street, Suite 2400Suite 2400Chicago, Illinois 60603(312) 460-5882pdevata@seyfarth [email protected]

Agenda/IntroductionAgenda/Introduction

• Brief Overview of EEOC Guidance Relating to Arrests gand Convictions in Employment

O ti f C li• Options for Compliance

• Best Practices• Best Practices

©2012 Seyfarth Shaw LLP6 |

EEOC’s E-RACE Initiative (Cont.)( )

• The EEOC’s argument

► National data supports that use of criminal history has “disparate impact” on certain minority groups based on race and national originand national origin.

►Disparate Treatment -- typical Title VII analysis

►Disparate Impact -- Argument is that people of certain races and national origins are arrested more frequently than others outside of those groups and/or have negative credit g p ginformation; thus, employers using such information cause a disparate impact on certain minority groups.


Disparate Impactp p

• Disparate Impact: Title VII of the Civil Rights Act of 1964►Facially neutral policy►Has adverse/disparate impacts on certain protected groups.

• 42 U.S. C. §§2000e-2(k)(1)(A)(ii) & (k)(1)(C); Griggs v. Duke Power Co., 401 U S 424 431 (1971)401 U.S. 424, 431 (1971).

• Aggrieved party must show statistical disparate impact►EEOC Guidance assumes there is a disparate impact unless employer

can show evidence that there is notcan show evidence that there is not►Guidance states it will NOT be enough to show diverse workforce►Will look at employer’s reputation in community for exclusion of people

with criminal records recruitment practices and publicly postedwith criminal records, recruitment practices, and publicly posted notices.

• Burden then shifts and Employer must prove “business necessity”/job relatedness AND no other less restrictive means of


necessity /job relatedness AND no other less restrictive means of obtaining the same information

Public Meetingg

• Public Meeting Held April 25 at 9:30 a.m. ESTg• Vote:

►Not surprisingly, not unanimous►4 Commissioners in favor; 1 opposed►4 Commissioners in favor; 1 opposed

• Commissioner Barker (R) opposed

• Opening statements ►Discussed disparate impact and high number of incarcerations►Also discussed disparate treatment issues with 90% of►Also discussed disparate treatment issues with 90% of

companies conducting background checks for employment

►“Hundreds” of charges pending


► Hundreds of charges pending

Overview of Guidance

• No Bright Line Rules►“We don’t hire felons”► We don t hire felons

• 3 factor test based on case: Green v. Missouri Pacific RR ►Nature and gravity of the offense►Nature and gravity of the offense►Time since the conviction and/or complete of the sentence►Nature of the job held or sought

• Individualized Assessment

• Criminal History QuestionCriminal History Question►Timing: Recommend not on the application►Scope: Only what you need

• Information from background screening provider


Information from background screening provider

Criminal History Questiony

• Guidance recommends not asking about arrest or gconvictions on job applications

• Only ask about convictions relevant to a specific job►What position?►What position?►Still want falsification argument.►Practical effects:

• Different employment applications/criminal history questions• Ask later in the process?

• before or during the interviewft i t i• after an interview

• after conditional offer• Consider who will see the results and what action will be taken


Questions to Consider

• Will you ask about criminal history?►when and what?

• Will you Conduct Background Checks for your own employees?Will you Conduct Background Checks for your own employees?

• Will you apply clients’ criteria that are problematic?

• Consider Implementing a Matrix to protect yourself and clients

• What information will you receive from background provider?►Only certain crimes?►Certain time limit?►Certain time limit?


Arrest Records

• Arrest Records►Guidance indicates use of arrests has a per se disparate impact ►Use of arrest records is not job related or consistent with

business necessity.y• Employers may base a hiring decision on underlying conduct if the

conduct makes the individual unfit for a position.• Only way an employer will learn about the conduct is to either:

• investigate; or • Talk to the individual

• Examples indicate that an employer can put an individual on an id d i i t ti l d i th i ti tiunpaid administrative leave during the investigation.

►Does not distinguish between charges that are pending with a court date or older charges with no prosecution


Individualized Assessment

• Individualized Assessment►EEOC recommends an “individualized assessment” of applicants►EEOC recommends an individualized assessment of applicants ►Though not “required”, employers will need to evaluate if there are any

criminal offenses that have a “demonstrably tight nexis to the position in question” such that an individualized assessment may be circumventedcircumvented.

►Evidence an employer should review:• facts or circumstances surrounding the offense or conduct;• number of offenses for which the individual was convicted;• older age at the time of conviction or release from prison;• older age at the time of conviction, or release from prison;• evidence that the individual performed the same type of work, post

conviction, without any known incidents of criminal conduct;• length and consistency of employment before and after offense;• rehabilitation efforts;rehabilitation efforts; • character references; and• whether individual is bonded under a federal, state, or local bonding

program. ►Large change for employers


►Large change for employers

Individualized Assessment Optionsp

►Consider timing of individualized assessment:g• On application• During interview• After interview• After background check completed

►Record keepingk h t• worksheet

• excel spreadsheet/master list

►May be able to use CRA to assist in gathering /get some►May be able to use CRA to assist in gathering /get some information

• education/employment information• request additional information in pre-adverse action


q p• telephone call/discussion• applicant submit written submission

What Information to Consider

• Guidance indicates use of arrests has a per se disparate impact

• Employers may base a hiring decision on underlying conduct if the conduct makes the individual unfit for a position.

• Only way an employer will learn about the conduct is to either:• investigate; or • Talk to the individual

• All convictions or only specific types?►Theft, fraud, violence, drug manufacture/distribution?►Timing? (7 years or some other or all?)►Timing? (7 years or some other or all?)


Compliance with Other Lawsp

• Employers should evaluate whether other laws on which they may be relying as a defense to run specific criminal history or eliminatebe relying as a defense to run specific criminal history or eliminate an applicant/employee are preempted by Title VII.

If state or federal law regulates you should comply with those laws• If state or federal law regulates, you should comply with those laws►Some reason that they are in effect, presumably job relatedness


Validation studies?

• Employers will likely show job related and consistent with business necessity if it can prove either that:► It validates the use of specific criminal history by having

data or analysis about criminal conduct as related to b t k fsubsequent work performance;

• Given lack of clear studies, may require I/O psychologist or criminologist

• ExpensiveExpensive


EEOC Litigation on Criminal Historyg y

09/2008 - EEOC v. Peoplemark, Inc. (W.D. MI) (disparate impact on use of criminal history)

►Case dismissed and EEOC sanctioned

09/2009 - EEOC v. Freeman Companies (D.MD) (disparate p ( ) ( pimpact on use of credit and criminal history)

►Motion for Summary Judgment Pending

• 6/11/20136/11/2013►EEOC v. Dollar General (N.D. IL)

• Alleges disparate impact race discrimination on behalf of Black applicants where 7% white applicants not hired; 10%Black applicants where 7% white applicants not hired; 10% Blacks not hired

►EEOC v. BMW (S. Carolina)• Alleges disparate impact race discrimination for 69Alleges disparate impact race discrimination for 69

applicants


EEOC Focus on Background Checksg

• Since 2007, EEOC has identified “issues, criteria and barriers” that contribute to race and color discrimination inbarriers that contribute to race and color discrimination in the workplace (E-RACE (Eradicating Racism and Colorismin Employment)

• 2012 EEOC Strategic Enforcement Plan outlined “hiring issues” as a main focus, including background checks

• Argument is use of criminal history has disparate impact on• Argument is use of criminal history has disparate impact on minority groups

• Issued Criminal History Guidance in April 2012• Hundreds of charges pending at District offices


PRESENTATION TITLE

An FCRA Primer

The Fair Credit Reporting Act Applies In More Contexts Than You Might Imagine

Cindy D. Hanson Kilpatrick Townsend & Stockton LLPKilpatrick Townsend & Stockton LLP [email protected](404) 815-6500

The FCRA and Background Checks

• The Fair Credit Reporting Act (“FCRA”) outlines detailed procedures that must be followed when consumer reportsprocedures that must be followed when consumer reports, including credit reports and criminal background checks, are used for employment purposes. Adh t th d i i t t b th• Adherence to these procedures is important because the FCRA provides for statutory damages of $100 to $1,000 for each willful violation of the statute, making the

f t ti ll t t hiexposure for a company potentially catastrophic. • Indeed, recent settlements of FCRA class actions

involving employee background checks have numbered in g p y gthe tens of millions of dollars.

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An FCRA Primer

• The FCRA requires that certain procedures be followed when a “consumer report” is used for employment purposes. 15 U.S.C.consumer report is used for employment purposes. 15 U.S.C. § 1681 et seq.

• Under the FCRA, a consumer report is a written, oral or other communication of information by a consumer reporting agencycommunication of information by a consumer reporting agency that bears on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living that is used or expected to be gused or collected for establishing the consumer’s eligibility for personal credit or insurance, employment, or other purposes authorized by the FCRA. 15 U.S.C. § 1681a(d).

• Thus, a consumer report is much broader in scope than just a credit report or a background check—it includes criminal and civil records, driving records, civil lawsuits, reference checks and

f23

other information obtained by a consumer reporting agency.

Duties of Employers Who Intend to Use Employee Background Checks

• An employer’s duties vary at each stage of the hiring process when a background check or otherprocess when a background check or other consumer report is used.

• The disclosure form;• The applicant or employee’s written authorization;• Dealing with a derogatory report;• Taking an adverse action.

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The Disclosure Form

• The FCRA requires that a company disclose to the applicant or employee that a background check willapplicant or employee that a background check will be obtained for employment purposes. This disclosure must be made in a document that consists only of the disclosure. 15 U.S.C. § 1681b(2)(A)(i).

• In other words, the disclosure form should be a single page consisting of only the text necessary to informpage consisting of only the text necessary to inform the applicant or employee that the employer intends to obtain his criminal background check or other

tconsumer report.

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The Applicant or Employee’s Written Authorization

• The FCRA also requires that the employer obtain the applicant’s or employee’s written authorization to procure a backgroundor employee s written authorization to procure a background check or consumer report. The FCRA allows the employer to include this written authorization, typically a signature line confirming that the consumer report has been authorized, on the g pdisclosure form described above. FTC Opinion Letter, Steer, October 21, 1997, http://www.ftc.gov/os/ statutes/fcra/steer.shtm.

• Nothing more than the disclosure and written authorization may be on the form. 15 U.S.C. § 1681b(2)(A)(ii) (emphasis added).

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Investigative Consumer Report

• If the employer is also having a consumer ti d t i t i ith ireporting agency conduct interviews with prior

employers or gather others types of information via interviews the employer isinformation via interviews, the employer is obtaining an “investigative consumer report.”

• For such a report the FCRA requiresFor such a report, the FCRA requires additional disclosures be made to the applicant. See 15 U.S.C. § 1681d (a) and (b). pp § ( ) ( )

27

Dealing with a Derogatory Report

• When a report contains information that could negatively impact an individual’s eligibility for hire or promotion theimpact an individual s eligibility for hire or promotion, the FCRA requires that certain steps be taken by users of background checks or other consumer reports in the employment context It is of the utmost importance thatemployment context. It is of the utmost importance that these steps be completed before any “adverse action” is taken with respect to the applicant or employee. A “ d ti ” i d fi d b dl d th FCRA• An “adverse action” is defined broadly under the FCRA and includes, among other things, an employment denial, termination, or any unfavorable change in employment. See 15 U.S.C. § 1681a(3)(k).

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Dealing with a Derogatory Report (cont.)

• An entity considering taking adverse action based in whole or in part on a background check must do thewhole or in part on a background check must do the following, before taking the adverse action: – Provide the applicant or employee with a copy of pp p y py

the background check or other consumer report. – Provide the applicant or employee with a summary

of his rights under the FCRA as prescribed by theof his rights under the FCRA, as prescribed by the Federal Trade Commission. See FCRA Summary of Right, http://www.ftc. gov/bcp/edu/pubs/consumer/credit/cre35.pdf

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• The summary of rights includes:– Notification that the applicant or employee is entitled to receive pp p y

a free copy of the background check or consumer report on which the adverse action was based.

– Notification that the applicant or employee has a 60-day period in which to obtain his free report and the employer’s notice toin which to obtain his free report, and the employer s notice to the applicant or employee must so state.

– The name and contact information for the consumer reporting agency that provided the background check on which the g y p gadverse employment decision was based. • The contact information provided should include the name,

address, and phone number for the consumer reporting agency If a toll free telephone number is available for theagency. If a toll-free telephone number is available for the consumer reporting agency, it should be provided to the applicant or employee.

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(continued)– A statement advising the individual that the consumer reportingA statement advising the individual that the consumer reporting

agency did not make the adverse employment decision and cannot, therefore, provide any reasons why the adverse action was taken. 15 U.S.C. § 1681m(a)(1)-(2).

• 15 U.S.C. § 1681b (3)(A).

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The Pre-Adverse Action Notice’s Purpose

• The purpose of this pre-adverse action notice is to provide the consumer with an opportunity to disputeprovide the consumer with an opportunity to dispute and correct any inaccurate information in the background check and thereby avoid the adverse employment action that the employer might take based on the report.

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Taking an Adverse Action

• After providing the pre-adverse action notice described above, the employer must wait a reasonable period of time beforethe employer must wait a reasonable period of time before taking any adverse action − typically declining to hire or promote the individual − based in whole or in part on information in a background check. g

• Upon taking an adverse action, the employer must provide notice to the consumer of the action. This is a second, distinct notice from the pre-adverse action notice described above. Such notice may be provided orally, in writing or electronically.

• The notice to the employee or applicant must disclose that individual’s right to dispute information in a background check with the consumer reporting agency that furnished it. 15 U.S.C. § 1681m(a)(3).

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Attorney Lester S. RosenFounder & CEO of Employment Screening Resources® (ESR)

Phone: 415 898 0044Phone: 415.898.0044Email: [email protected]

Website: www.ESRcheck.com

Employment Screening Resources Novato CA www.esrcheck.com

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Attorney Lester S. Rosen is Founder & CEO of Employment Screening Resources® (ESR) a nationwide background checkScreening Resources (ESR), a nationwide background check firm accredited the National Association of Professional Background Screeners (NAPBS®).

h h f “ h f l ” h f He is the author of “The Safe Hiring Manual,” the first comprehensive book on background screening, and is a frequent speaker nationwide on due diligence issues.q p g

He has qualified and testified as an expert in court cases, has testified before the California Legislature on laws relating to background checks and is rated A V byMartindale Hubbellbackground checks, and is rated A.V. by Martindale‐Hubbell.

He was the chair of the steering committee that founded the NAPBS and served as first co‐chair.

Employment Screening Resources Novato CA

In addition to federal Fair Credit Reporting Act (FCRA) at least 21

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In addition to federal Fair Credit Reporting Act (FCRA), at least 21 states arguably have stricter FCRA rules.

Many states have additional rules on the use of criminal records:◦ Some rules prevent a screening firm from reporting criminal information in the first place (e.g. seven year rule)

◦ Some states prohibit an employer from using information that a screening firm may report (e.g. arrest records)

◦ Number of states have discrimination laws impacting criminal records◦ Numerous state and local laws regarding criminal records and eligibility for public employment or licenses that may be an issue under new EEOC Guidance since Federal law pre‐empts state law creating a potential Catch‐22

◦ Ten states now have rules regulating credit reports◦ States are increasingly looking at laws about access to social networking sites

Best practice: have your screening firm only report what you can legally use in your state


legally use in your state.

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Arizona Minnesota M t California

Colorado Georgia

Montana New Jersey New Hampshire Georgia

Kansas Kentucky

New Hampshire New Mexico New Yorky

Louisiana Maine

Oklahoma Rhode Island Texas Maryland

Massachusetts

Texas Washington Nevada?


At l t 11 t t h 7

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At least 11 states have a 7‐year limit on criminal records – some states have

ti if li t

Other examples: CA‐numerous “only in California rules”an exception if applicant

has a higher income level (but Texas and Colorado

t d b FCRA d

California rules MA‐final adverse action letter must be in 10 point

pre‐empted by FCRA and Nevada is unsettled)

Various states have special l f

type minimum within 10 days with specified languagerules for:

◦ Disclosure form for consumer◦ Rules for Investigative Consumer Reports

g g NJ‐special notifications of reason why dispute is f i lConsumer Reports

◦ Nature and Scope letter◦ Disputed Accuracy procedures◦ Timing and notice of reportsN ifi i i d

frivolous NY‐corrected copy rule


◦ Notification periods

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Some states limit employers from using arrests such as California Hawaii Illinois

Some states limit first offense records, records based upon a certain age (other than a California, Hawaii, Illinois,

Massachusetts, Michigan, Nevada, New York, Pennsylvania, Rhode Island, Utah, Virginia,

g (seven year limit) or diversion/non‐adjudication programs, such as California, Georgia Hawaii Illinois andRhode Island, Utah, Virginia,

Washington, and Wisconsin (also an issue under the EEOC).

Georgia, Hawaii, Illinois, and Massachusetts

Some states place limits on EMPLOYERS, such as

Some states limit expunged or sealed records such as California, Colorado, Hawaii, Illinois, Louisiana Maryland New Jersey

California, Hawaii, Illinois, Massachusetts, Michigan, Nevada, New York, Pennsylvania Rhode IslandLouisiana, Maryland, New Jersey,

Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Texas, Utah, and Virginia

Pennsylvania, Rhode Island, Utah, Virginia, Washington, and Wisconsin


and Virginia.

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Many states have rules reflecting EEOC guidelines – arrest or conviction must have rational relationship to job given nature and gravity of the offense, nature of the job, and age of offense.offense.

Case in point: New York goes beyond “Green” factors in listing criteria and includes various notice requirements.

EEOC Guidance emphasizes that state rules concerning eligibility for public jobs or licenses can be discriminatory and violate Title VII◦ Employers placed in potential Catch‐22 between state/local requirements and EEOC.


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Issue – which law applies anyway.

Key issue for employers with facilities in multiple states that have diff ldifferent rules.

General rule of thumb – law of the state where the job occurs (but arguments can still be made to use law where applicant resides ifarguments can still be made to use law where applicant resides if different).

2010 case in New York on age discrimination helps clarify:

◦ Plaintiff terminated in Atlanta, tried to sue in NY where decision was made and where law was more favorable for age discriminationdiscrimination.

◦ Highest NY court ruled 4‐3 that there was no jurisdiction since the IMPACT was not in NY.


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Commercial criminal databases can be very valuable since they contain millions of records.

Can be argued that failure to use a database is negligent. But one of the biggest areas of criticism against screening is But one of the biggest areas of criticism against screening is “false positives” based on a database use where there is no re‐verification at courthouse (as required in California).

See http://www.concernedcras.com/ on responsible database use.

Issues with FCRA section 613 notice and TIMING Issues with FCRA section 613 notice and TIMING. Best use of commercial database is as a “lead generator.”


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Credit reports ran on finalists – not all applicants.

Credit report used to decide who not to hire, not a tool to keep people from the workforcepeople from the workforce.

Urban myth – employment credit reports DO NOT contain credit scores, but only credit history.

Al d t h d d t i t dit Also does not have age, and does not impact credit score.


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Credit reports can appear to invade privacy and potentially be discriminatory unless measures taken to ensure their use is yfair, accurate, and relevant

Potential discrimination: EEOC held meeting on topic, and expected to produce new guidanceexpected to produce new guidance

Can have errors or not tell the whole story:◦ Refinance situation◦ Confused with someone else◦ Credit card used for child’s health care

d d d f l◦ Used during period of unemployment


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Ten (10) states have currently have laws restricting credit report checks in some fashion:◦ California◦ California ◦ Colorado◦ ConnecticutH ii◦ Hawaii◦ Illinois◦ Maryland

d◦ Nevada◦ Oregon◦ Vermont◦ Washington

Best Practice: Approach with caution and use only for positions where there is a business justification based upon the job.


Use of social networking checks on the rise to avoid

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Use of social networking checks on the rise to avoid problematic hires. Issues include:◦ Can expose employers AND recruiters to discrimination claims if internet search reveals protected data such as nationality race religioninternet search reveals protected data such as nationality, race, religion, age, or medical issue.

◦ Issues of appearance, grooming, or religious affiliations revealed by photos.p

◦ Is there a reasonable expectation of privacy based upon the terms of use and generally accepted standards?

◦ Legal off‐duty conductLegal off duty conduct.◦ Issue of identifiers and authenticity – is it really your applicant?◦ Can employers require applicants to provide a password or allow “shoulder surfing” a number of states have either passed or areshoulder surfing – a number of states have either passed or are considering bills that prohibits such use.

◦ Critical: essential to have employment social media pol icy as well but be careful no to run afoul of employee rights under the NLRB.


be careful no to run afoul of employee rights under the NLRB.

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Have job description with the essential functions of the job and the knowledge, skills, and abilities neededH d t d t i i i di i i ti Have documented training in discrimination

Establish standard practice to show decision made on objective basis without use of illegal criteriaP f th h l b hi d “ thi ll” th t Perform through an employee behind an “ethics wall” that does not make hiring decisions, that filters out material using standardized procedures, and only provides job related data to the decision makers after there has been an offerto the decision makers after there has been an offer

Do not let decision makers view unfiltered internet/social media data

Consider showing negative material to applicant first Consider showing negative material to applicant first Should a background screening firm perform the task? ◦ FCRA issues leaves this an unsettled area


48

In 2010, the National Association of Professional Background Screeners (NAPBS®) instituted an intensive Background Screening Agency Accreditation Program (BSAAP).

Rigorous third party audit related to six critical areas:1. Consumer Protection2 Legal Compliance2. Legal Compliance3. Client Education4. Product Standards5 S i St d d5. Service Standards6. General Business Practices

NAPBS accreditation becoming only practical means of third party verification of professionalism and competency of screening firm.


Some 50 cities and counties in the United States have already

49

Some 50 cities and counties in the United States have already adopted “Ban the Box” and some states (e.g. MN an MA).

The “Box” refers to a question on an application about criminal records.criminal records.

Governmental agencies have a vested interest in getting ex‐offenders back to work.

Some jurisdictions, such as Boston, requires contractor to “ban the box.”

EEOC has recommend but not required private employers “ban the box.”

The National Employment Law Project (NELP) tracks current The National Employment Law Project (NELP) tracks current jurisdictions ‐ See: http://nelp.3cdn.net/495bf1d813cadb030d_qxm6b9zbt.pdf

Should private employers “ban the box?” Should private employers ban the box?◦ Why use a criminal questions as an early knock punch and invite an investigation or litigation when employer can simply use normal progressive screening and eliminate candidates that do not have the knowledge, skills, ability or qualifications.


knowledge, skills, ability or qualifications.

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A group of national civil and workers’ rights organizations has released a new report titled ‘Best Practice Standards: The P U f C i i l R d i Hi i ’ h dd hProper Use of Criminal Records in Hiring’ that addresses the use of criminal records of job applicants by employers during employment background checks.

See more at: http://www.scribd.com/doc/142787063/Best‐Practices‐Standards‐The‐Proper‐Use‐of‐Criminal‐Records‐in‐Hiring. g


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1. CONSIDER ONLY CONVICTIONS AND PENDING PROSECUTIONS

2. CONSIDER ONLY CONVICTIONS THAT ARE RELEVANT TO THE JOB IN QUESTION

8. CONFIRM ALL INFORMATION FROM ONLINE DATABASES WITH ORIGINAL SOURCE

9 GET CURRENT DISPOSITION OF ALLARE RELEVANT TO THE JOB IN QUESTION 3. CONSIDER ONLY CONVICTIONS RECENT

ENOUGH TO INDICATE SIGNIFICANT RISK 4. DO NOT ASK ABOUT CRIMINAL

9. GET CURRENT DISPOSITION OF ALL RELEVANT INFORMATION

10. PROVIDE APPLICANT THE OPPORTUNITY TO CHALLENGE THE

’RECORDS ON APPLICATION FORMS 5. USE A QUALIFIED CONSUMER

REPORTING AGENCY (CRA) TO CONDUCT RECORD CHECKS

CRA’S REPORT 11. ALL CHARGES RELATED TO A SINGLE

INCIDENT SHOULD BE REPORTED AS A SINGLE ENTRYRECORD CHECKS

6. THE CRA SHOULD REPORT ONLY CONVICTIONS THAT ARE RELEVANT AND RECENT

12. CONSIDER EVIDENCE OF REHABILITATION

13. MINIMIZE CONFLICT OF INTEREST 7. REPORT CONVICTIONS ONLY WHEN

FULL NAME AND ONE OTHER IDENTIFIER MATCH

BY DECISION MAKERS 14. TRAIN HUMAN RESOURCES STAFF 15. HAVE A DIVERSITY PROGRAM


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Background checks are mission critical for any organization to protect itself and to demonstrate due diligence.

However subject to increasing regulation litigation and However, subject to increasing regulation, litigation and legislation.

Need to perform background checks, but need to ensure Need to perform background checks, but need to ensure done in a legally compliant manner.


Best Practices for Employers to Minimize RiskMinimize Risk

Pamela Q. Devata, Seyfarth Shaw

Employer Best Practices

• Review Employment Applications (ie: Ban the Box)p y pp ( )• Review Background Screening Policies/Procedures

• Disclosure and Authorization forms• Adverse Action Process

• Review and narrow the positions for which you are running credit checksg• Accounting/Finance• HR

Information Technology• Information Technology

54 | © 2012 Seyfarth Shaw LLP

Employer Best Practices (con’t)

• Run credit checks only after conditional offer of yemployment/ or after interview

• Consider state laws for credit (10 states)• In addition to FCRA requirements, discuss concerns with

applicant/employee


Other Common Questions From EmployersEmployers

• What criminal history information can be used to make yan employment decision?

• What background checks should they be conductingJ b l d i (WI NY PA HI KS MO)• Job related requirements (WI, NY, PA, HI, KS, MO)

• On whom should the checks be run? (whole workforce, executives, specific departments), p p )

• Should they have a policy (who adjudicates, specific parameters or case by case?)

• HI does not allow pre-employment screening except for very specific jobs


Best Practices for Background Checks

• What should a background check include?g• What may a company legally ask for in a search?• What is unlawful?

If you don’t know what you are getting when you order a background check, you probably won’t get what you need and you may create liability for yourwhat you need, and you may create liability for your company



A good CRA will search for records in a variety of g ylocations:

• County courthouses• State criminal records repositories• The federal Integrated Automated Fingerprint

Identification SystemIdentification System• Private databases maintained by some criminal

background checking companies• Each of these sources contains different information

which may be relevant to your background check.



How to get a good background checkg g g1. What to ask for from the applicant (Identifiers)

• Full Name (including maiden, middle, previous, aka)• Date of birth• Date of birth• Social security number (properly maintained in a secure location)• Driver’s license number

2 What to ask for from the CRA2. What to ask for from the CRA• Search methods (including sources in consults and frequency)• Who performs the search? Who reviews the information after it is

collected? (Usually a search company will hire “runners” to go tocollected? (Usually a search company will hire runners to go to various court houses and collect data)

• Turn-around time for a search (should be three days or less)• How it handles incomplete or inaccurate records


• How it handles incomplete or inaccurate records


Generally, consumer reports may not contain:1 B k i h d h b (10)1. Bankruptcies that pre-date the report by ten (10) or more years;2. Records of arrest or civil proceedings that pre-date the report by

more than seven (7) years or until the governing statute of limitations has expired;p ;

3. Paid tax liens that pre-date the report by more than seven (7) years;

4. Accounts placed for collection that pre-date the report by more than seven (7) years; orthan seven (7) years; or

5. Any other adverse item of information (excluding criminal convictions) that pre-date the report by more than seven (7) years. 15 US.C. § 1681c(a).

BUT: Just because information is legally contained in a consumer report, that does not mean the employer is legally allowed to use it in an employment decision!!!



State law controls what information an employer may p y yconsider when making an employment decision.

• For example, at least 12 states prohibit an employer from using an applicant’s arrest record when making an employment decision.p y

• Most states also restrict an employer’s use of criminal records that are sealed, annulled, expunged and/or

d d b thpardoned by the governor.IF YOU ARE NOT ALLOWED TO USE IT, DO NOT ASK FOR IT!


EEOC Guidance Best Practices

GENERAL• No Bright line policies

• USA Fact can assist with applying criteria, but EEOC does not like ineligible without factors and individualized assessmentineligible without factors and individualized assessment

• One size fits all will likely be challenged

• Train managers, hiring officials, and decision-makers about Title VII and its prohibition on employment discrimination;discrimination; • share guidance and draft policies that are in accordance


Best Practices

DEVELOPING A POLICY• Develop a narrowly tailored written policy and procedures for screening for criminal• Develop a narrowly tailored written policy and procedures for screening for criminal

records; • Only request information that is job related from a background screening vendor

• Identify essential job requirements and the actual circumstances under which the jobs are performed; • Only ask about and request criminal history information that is job related to those• Only ask about and request criminal history information that is job related to those

requirements.• Determine the specific offenses that may demonstrate unfitness for performing such

jobs; • Identify the criminal offenses based on all available evidence; • Review studies seminars etc• Review studies, seminars, etc.

• Determine the duration of exclusions for criminal conduct based on all available evidence; • Individualized damage assessment

• Record the justification for the policy and procedures; • Note and keep a record of consultations and research considered in crafting the

policy and procedures.• Train managers, hiring officials, and decision-makers on how to implement the policy

and procedures consistent with Title VII;


Best Practices

QUESTIONS ABOUT CRIMINAL RECORDSQ• When asking questions about criminal records, limit

inquiries to records for which exclusion would be job l t d f th iti i ti d i t t ithrelated for the position in question and consistent with

business necessity.• Consider timing of the criminal history question so as not g y q

to chill applicants from applying.CONFIDENTIALITY• Keep information about the criminal records of

applicants and employees confidential (only use it for the purposes for which it was intended).p p )


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