Your background checking step in your hiring process is under increased scrutiny. Some employers have paid a hefty price for processes that don’t meet the legal requirements.

In November of 2013, staffing company, Aerotek and their parent company Allegis, received notification of a class action suit filed by employees claiming adverse impact stemming from Aerotek’s failure to inform them of the adverse employment action they were taking based on the results of a criminal background check. In this particular case, Aerotek removed an employee from an assignment based on information obtained in a Criminal Background check obtained ten days after the employee had begun work.

In early April, 2015, Amazon Inc. received a similar notice of a proposed class action suit, accusing them and one of their staffing agency partners for a similar offense – in this case failing to provide prospective employees with the results of a criminal background check before making decisions to assign them to an Amazon facility. In the Amazon case, the employee was denied the opportunity to begin work based on the results of a criminal background check that unfortunately contained false information.

Here’s the deal….

Today a criminal background check is almost universally required to go to work for any company. At PACE most of our clients require us to conduct a criminal background check before the employee can be placed on a temporary assignment. Typically the client decides if the result of the background check satisfy their internal policy requirements but on occasion we are asked to oversight those decisions on their behalf. In all cases we work closely with our clients in adjudicating placement decisions based on background checks knowing that the EEOC has a vested interest in ensuring there is no disparate impact on any protected class based on an unneeded factor that creeps into decision making.

In Washington State, we are unable to conduct a background check until after a hiring decision has been made and an candidate is offered a job as a way to ensure no unnecessary biases creep into the selection process. The reason for rejecting a candidate must always make business sense.

Scrutiny on the basis of the Fair Credit Reporting Act after these 2013, 2015 cases started to increase with more attention given to certain aspects of the law that prior to 2013 had only been casually enforced. As example, FCRA requires that the authorization to do a background check be “clear and conspicuous” – it must stand out from the rest of the application process. Class action lawsuits were filed against several prominent employers because their disclosure forms did not meet the stand alone requirement – an issue easily fixed by keeping the “disclosure notices” separate from the application form. Today FCRA violations are definitely an issue requiring all employers to take a close look at what’s required.

Recommendations to PACE clients regarding their use of background checks:

1. Make sure that in your application process, your disclosures and authorization documents are stand alone documents. Don’t intermingle these documents with your application form or other employment related documents.

2. Check out the full scope of your legal responsibilities under BOTH EEOC and FCRA requirements. Here’s the link to the EEOC website that discusses the employers role in conducting background checks http://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm

3. In your service agreements with any staffing vendor providing employees to your facility, state clearly who will be conducting a background check and describe how you want that information used.

4. In Washington State be aware that a criminal background check CANNOT BE USED AS A DISQUALIFYING FACTOR in the hiring decision until after other vetting processes have been completed and the candidate is offered and has accepted a role. Your policies for how you will adjudicate background check outcomes can be communicated prior to hire, but offers of employment should be made contingent on completion and review of the candidate’s criminal background check.

5. Make sure that if an employee is denied the opportunity to be assigned to your company based on information discovered in a background check conducted by your staffing agency, that your agency is advising them of this adverse action, giving them time to challenge the accuracy of the information leading to that outcome. (Both an employer and their staffing agency are subject to claims of unlawful adverse impact.)

6. Make sure your staffing agency as a matter of policy and practice are complying with all FCRA administrative requirements

a. Find out if they are informing candidates of the possibility that an investigative report will be conducted and how it will be used – in particularly make sure they indicate there could be “adverse action” taken based on the discoveries.

b. Find out how they are informing candidates of an adverse action and their internal procedures for handling those scenarios. By law they are required to disclose the adverse report, provide a statement of the candidate’s rights to contest the accuracy of an investigative report, and instruction on how to contest that information . You need to make sure that your staffing agency follows all these steps.

7. Make sure all your internal policies regarding how candidates will be handled based on background check discoveries are in keeping with the intent of the law which is to avoid any screening factors unrelated to actual business needs. “No arrest” policies are specifically precluded. “No felony” policies will always be suspect. Both you and your staffing agency are accountable to ensure that all employment actions are made in ways that do not discriminate against any class of protected class candidates.