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Total Articles: 70

Sixth Circuit Upholds Jury Award Of Compensatory Damages Against CRA Under The FCRA For Negligence, But Vacates Punitive Damages Award

Executive Summary: The Sixth Circuit Court of Appeals in Smith v. LexisNexis Screen Solutions, Inc., __ F. 3d ___, 2016 WL 4761325 (6th Cir. September 13, 2016), recently upheld a jury verdict in favor of a plaintiff in a Fair Credit Reporting Act (FCRA) case, who was initially denied a job due to an error made by LexisNexis Screen Solutions, Inc. (Lexis) in performing a background check. The Sixth Circuit found that the evidence supported the jury’s verdict that Lexis was negligent and upheld the $75,000 compensatory damages award, but found no evidence of willfulness and reversed the punitive damages award.

Supreme Court Raises Bar for Fair Credit Reporting Act Claimants

The Supreme Court ruled in Spokeo v. Robins that a plaintiff must allege something more than a mere statutory violation of the Fair Credit Reporting Act (FCRA) to be able to pursue a federal claim.

Supreme Court: ‘Actual Injury’ Needed to Establish Standing to Sue for Violations of Fair Credit Reporting Act

Plaintiffs must show they suffered from an actual injury, not just a “bare procedural violation,” in order to sue in federal court, the U.S. Supreme Court has ruled in its long-awaited decision in Spokeo, Inc. v. Robins, No. 13-1339 (May 16, 2016).

SCOTUS Fair Credit Reporting Act Background Check Standing Case Remanded to Lower Court

Executive Summary: On May 16, 2016, in a 6-2 decision, the U.S. Supreme Court remanded the closely watched Spokeo Inc. v. Robins case back to the Ninth Circuit for further analysis. The issue is whether the plaintiff, Robins, has standing to sue Spokeo under the Fair Credit Reporting Act (FCRA) for injuries allegedly caused by Spokeo's dissemination of incorrect information about Robins. Standing requires the plaintiff to show (1) injury (2) that is fairly traceable to the defendant's conduct, and (3) that is likely to be redressed by a favorable judicial decision. The appeals court held that Robins had standing. The Supreme Court, however, vacated the appeals court's decision and remanded the case back to it to consider whether Robins' complaint sufficiently alleged that his claimed injuries were "concrete." The case is still alive. Employers had hoped that the Supreme Court's decision would prevent plaintiffs from establishing standing by alleging mere statutory violations.

FTC Issues Guidance for Background Screening Companies

Employers regularly turn to background screening companies in order to obtain information/reports about applicants and employees. The Fair Credit Reporting Act (FCRA) applies to companies that sell or provide these background screening reports if such a report meets the FCRA’s definition of a “consumer report.” A consumer report is a report which serves as a factor in determining a person’s eligibility for employment, credit, insurance, housing, or other purposes and includes information bearing on an individual’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. Organizations that sell or provide consumer reports to employers are considered “consumer reporting agencies” under the FCRA.

FTC Releases Updated FCRA Guidance On Background Checks

On May 10, 2016, the Federal Trade Commission (FTC) released a new publication related to background checks and the Fair Credit Reporting Act (FCRA) titled What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act.1 As the name suggests, the publication surveys the obligations that consumer reporting agencies (background check companies or CRAs) have under the FCRA when compiling employment-purposed consumer reports (background reports). The FTC’s publication is a useful resource for employers for learning about the legal requirements governing the preparation of background reports by CRAs, and indirectly highlights several compliance requirements applicable to employers.

Federal Courts Increase Scrutiny of Employer Compliance with the FCRA's Adverse Action Requirements

In the last two years, the number of employment class actions under the federal Fair Credit Reporting Act (FCRA) has ballooned. Most of the cases reported in the media have involved challenges to an employer’s compliance with the FCRA’s disclosure and authorization requirements.

Why 'Ban the Box' Trend Has Huge Impact on Employers

More than 90 percent of employers use background checks to screen job applicants at some point in the hiring process. But a new trend is placing limits on when many employers can seek criminal history information.

President Obama's Order "Banning the Box" for Federal Employees is an Important Reminder to All Employers to Implement Hiring Best Practices

Last month, President Obama announced a new mandate to the federal government's human resources department to "delay inquiries into criminal history until later in the hiring process."

Obama Bans the Box on Federal Job Applications

President Obama has ordered all federal government agencies to stop asking prospective employees on job applications if they have a criminal record. Obama's "ban the box" announcement involves the box on initial applications that candidates are often asked to check off if they have ever been convicted of a crime.

Consent Decree Sheds Light on the EEOC’s Interpretation of its Background Check Guidance

On September 8, 2015, BMW Manufacturing Co., LLC and the U.S. Equal Employment Opportunity Commission (EEOC) entered into a consent decree ending the EEOC’s disparate impact lawsuit over BMW’s use of criminal background checks in employment. The consent decree requires BMW to pay $1.6 million and provide job opportunities to claimant and other applicants who were turned away under BMW’s prior background check policy.

President Obama Bans the Box in Federal Employment

On Monday, November 2, 2015, President Obama announced the federal government is joining the long list of large employers, 19 states, and more than 100 cities and municipalities that currently “ban the box” on employment applications. The President outlined several ideas to improve the reintegration of the formerly incarcerated into society. He noted that “millions of Americans have difficulty even getting their foot in the door to try to get a job; much less actually hang onto that job ... so, we’ve got to make sure Americans who paid their debt to society can earn their second chance.” To that end, he announced, “I’m taking action to ban the box for the most competitive jobs at federal agencies.” The “box” refers to the place on job applications where applicants are asked to indicate whether they have been convicted of a crime. Research confirms that a criminal record reduces the likelihood of a job call back or offer by nearly 50 percent.

EEOC Settles Background Check Litigation with BMW, But Also Faces Steep Attorneys’ Fees in Freeman Case

After several high-profile setbacks in disparate impact discrimination lawsuits challenging criminal record screening policies,1 the EEOC has entered into a settlement (consent decree) in one of its few remaining cases, a settlement that includes payouts to individual employees in an amount up to $1,600,000. Beyond this not insubstantial settlement amount, the consent decree also reflects the EEOC’s view of a model criminal record screening policy, and is useful in that respect.2 While the EEOC has been trumpeting the settlement on its Web site, the EEOC’s bluster may have been tempered by a further and strongly worded opinion in the Freeman case in Maryland, one of the EEOC’s spectacularly unsuccessful disparate impact lawsuits challenging criminal record screening policies (affirmed by the Fourth Circuit).3 The opinion awards Freeman just under $1,000,000 in attorneys’ fees and costs from the EEOC.

EEOC Settles Background Check Litigation with BMW, But Also Faces Steep Attorneys’ Fees in Freeman Case

After several high-profile setbacks in disparate impact discrimination lawsuits challenging criminal record screening policies,1 the EEOC has entered into a settlement (consent decree) in one of its few remaining cases, a settlement that includes payouts to individual employees in an amount up to $1,600,000.

Background Checks Abroad: What Global Employers Need to Know

Restrictions can vary wildly when conducting background checks in different countries. Erika Collins, co-chair of the international labor and employment group at Proskauer Rose, covers all the angles for multinational employers on this podcast.

Private-Sector Employers Doing Business with Local Governments may be Subject to Even More Ban-the-Box and Other Laws Restricting Consideration of Criminal Records

In 1998 Hawaii became the first state to pass a so-called "ban-the-box" law, prohibiting both private- and public-sector employers from inquiring about an applicant's conviction history until after the employer makes a conditional offer of employment.

When is a Background Search not a Background Search?

The Fair Credit Reporting Act (FCRA) was enacted to insure that consumer reporting agencies act with “fairness, impartiality, and respect for the consumer’s right to privacy.” But one federal court held recently that LinkedIn’s search technology does not make that site a “consumer reporting agency” for purposes of FCRA. As a result, a federal court magistrate judge recently dismissed the claims of a group of individuals who alleged that they were not hired because a potential employer used LinkedIn’s “Reference Search” feature to obtain background information on them. Sweet v. LinkedIn Corporation, NDCA, No. 5:14-cv-04531(April 14, 2015).

Supreme Court Will Resolve Fair Credit Reporting Act Dispute

The Supreme Court has agreed to decide if an internet people-search company, Spokeo, can be sued for displaying false information about a Virginia man to potential employers. The Court will hear Spokeo v. Robins in its next term, which begins in October 2015.

When is a background search not a background search . . . ?

In a thoroughly reasoned and illustrative opinion, one federal court magistrate judge recently dismissed the claims of a group of individuals who alleged they were not hired because a potential employer used LinkedIn’s “Reference Search” feature to obtain background information. Sweet v. LinkedIn Corporation, NDCA, No. 5:14-cv-04531, April 14, 2015.

New Technology Clashes with Statutory Requirements: Why Clicking "I Agree" May Not Be Enough

Since December 2014, retail giant Michaels Stores, Inc. (Michaels) has been hit with two class action lawsuits regarding its background-check process. The lawsuits allege that Michaels violated the Fair Credit Reporting Act (FCRA) by having job applicants click an "I Agree" box consenting to the terms and conditions of an online job application, which include an authorization to obtain a consumer report on the applicant.

Despite Recent EEOC Loss, Employers Must Be Cautious With Criminal Background and Credit Screenings

The U.S. Court of Appeals for the Fourth Circuit recently upheld a district court’s grant of summary judgment dismissing a U.S. Equal Employment Opportunity Commission (EEOC) legal action contending that a company’s policy of using criminal background and credit history checks in its hiring process disproportionately excluded African American applicants

‘Tis the (Retail) Season, Part II: Conducting Background Checks on Seasonal Workers

During the upcoming holiday season, many companies—especially those with retail operations—will be looking to expand their available workforce by hiring seasonal workers. Unfortunately, many of these temporary workers will be hired without much scrutiny. Although this approach is understandable given the frenzied pace of the holiday season, it is a risky proposition. Seasonal employees often have more direct customer contact and less supervision than regular employees have during the rest of the year. The wrong hire with a problematic background can create major liability. In short, short-term seasonal employees can have long-term implications. For this reason, many forward-thinking retailers have begun implementing a more robust background check process for seasonal hires.

Faulty Background Checks Can Be Very Costly

Unfortunately, many employers conduct background checks on applicants and employees without crossing the Ts and dotting the Is. Recent lawsuits and settlements totaling millions of dollars highlight the risk for employers who ignore the requirements of the Fair Credit Reporting Act (“FCRA”). It is mystifying how some employers seemingly are not aware of these 18?year?old requirements.

Misrepresentation on employment application may override state criminal background check law.

Most employers understand the importance of compliance with the federal Fair Credit Reporting Act (FCRA) as it applies to background checks and applicant records. However, employers also must recognize the interplay of state law restrictions on the use of background checks in the application and employment process.

Employee Background Checks: The First Step Before Determining Wages

In past Franczek Radelet Alerts and webinars, my colleagues and I have talked at length about the potential pitfalls for employers of background checks and the changes that the advent of the Consumer Financial Protection Bureau (CFPB) and the resulting reorganization at the FTC meant for employers. Yes, I know, this is a wage and hour-focused blog, but before you can tackle wage and hour issues, you have to hire employees! Many employers who do background checks have not given much thought to what (if any) documentation they collect from applicants or employees before running them, so with hiring season upon us for many seasonal industries, now is a good time for a reminder about this “pre wage and hour” issue.

EEOC and FTC Issue Joint Publications on Background Checks

On March 10, 2014, the U.S. Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) jointly released two pamphlets on the use of background checks in the workplace: (a) one directed at employers and (b) the other at applicants and employees. The two documents, Background Checks: What Employers Need to Know and Background Checks: What Job Applicants and Employees Should Know, may be found on the EEOC’s website. Although these documents are the first official federal insight on this topic since the 2012 release of the EEOC’s Enforcement Guidance on the Consideration of Arrest and Conviction Records, with one or two exceptions (discussed below), the documents do not break new ground; rather, they reiterate known “best practices” related to background checks in the employment context.

What's the Latest on Criminal Background Checks

Here’s a quick overview of the latest developments, followed by a more detailed discussion:

U.S. Senate Considering Ban on (Nearly) All Credit Checks

I just read that the U.S. Senate, via Senator Elizabeth Warren, is introducing a bill to ban the use of pre-employment credit checks altogether. The proposed bill is here.

Strike Two – The EEOC's Failed Attempts To Limit Background Checks

On August 9, 2013, the EEOC suffered its second defeat of the year in litigation involving employer use of criminal and credit background checks for employment screening. A federal district court in Maryland held that the EEOC’s expert analysis was statistically flawed, unreliable, and insufficient to demonstrate disparate impact. EEOC v. Freeman.

Strike Two – The EEOC's Failed Attempts To Limit Background Checks

On August 9, 2013, the EEOC suffered its second defeat of the year in litigation involving employer use of criminal and credit background checks for employment screening. A federal district court in Maryland held that the EEOC’s expert analysis was statistically flawed, unreliable, and insufficient to demonstrate disparate impact. EEOC v. Freeman.

EEOC's Criminal Background Guidance After a Year and a Half in the Field: Results are Mixed

It has been over a year since the United States Equal Employment Opportunity Commission (“EEOC”) issued its revised enforcement guidance on the extent to which employers may rely on an individual’s criminal history in making hiring or other employment selection decisions. See the April 26, 2012 eLABORate. Although employers may continue to struggle to determine how to best comply with the guidance, as demonstrated by a recent U.S. District Court decision, they are also not defenseless to claims that their policies are discriminatory.

EEOC Loses (Again) On Criminal-Background Checks

Last year, we wrote about the EEOC’s then-new guidance on the use of criminal-background checks in hiring decisions. [“Using Conviction Records As A Screening Tool,” Retail Industry Update, June 2012]. In December 2012, the Commission issued a strategic enforcement plan that included targeting background checks as a barrier to employment of minorities. In June of this year, the Commission trumpeted the filing of lawsuits against Dollar General and BMW North America claiming their use of criminal convictions in hiring violates Title VII.

EEOC Again Goes After Criminal Background Checks

The EEOC is still filing lawsuits against employers who conduct criminal background checks as shown in this June 11 press release. States are limiting criminal background checks too. Based on the government's current hostility, it is important to review your background check policies and procedures frequently in all states in which you do business.

EEOC Files Suit Over Employer Use of Criminal Background Checks

In an opening salvo following its recently revised enforcement guidelines, the Equal Employment Opportunity Commission (“EEOC”) has filed suit against two major employers, a national retail chain and an international automobile manufacturer, alleging the companies used criminal background checks to disproportionately exclude African-Americans from their workforces.

Employment Law Update: Background Becomes Battleground

The Equal Employment Opportunity Commission (EEOC or Commission) recently filed federal lawsuits against Dollar General and a BMW manufacturing plant in South Carolina based on the EEOC’s revised guidance concerning use of criminal background checks. The Commission’s new guidelines, revised last year, recommend that employers not ask applicants about past criminal convictions and encourage employers to give job applicants an opportunity to explain past criminal misconduct before they are rejected. The EEOC emphasizes that background checks have a discriminatory impact on minorities and can violate Title VII of the Civil Rights Act – even if the background check policy applies to all applicants regardless of race.

CREDIT CHECKS IN EMPLOYMENT: WHERE EMPLOYERS STAND AFTER KAPLAN

The Equal Employment Opportunity Commission and some state and local governments became concerned with employers’ use of credit checks following the 2008 economic crisis. Many people found themselves out of work, negatively affecting credit scores. Others were unable to pay their mortgages when subprime mortgage rates adjusted, which also lowered their credit ratings.

"And By The Way, Are You A Criminal?"

According to some studies, over 90% of employers conduct criminal-background checks for some job applicants and over 70% of employers conduct background checks on all potential new hires. This includes many hospitality-industry employers. Most decision-makers want information about criminal behavior and other related data before bringing a candidate into the organization.

Criminal Background Checks: OFCCP Backs EEOC'S Guidance

In a surprising move, on January 29, 2013, the Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP") issued Directive 306, entitled "Complying with Nondiscrimination Provisions: Criminal Record Restrictions and Discrimination Based on Race and National Origin," instructing federal contractors to strongly consider federal anti-discrimination laws before excluding applicants from employment based on the results of criminal background checks. In so doing, the OFCCP adopted the Revised Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions issued by the Equal Employment Opportunity Commission ("EEOC") on April 25, 2012. Click here for our discussion of the revised guidance.

Employers Faced January 1, 2013, Deadline to Update Fair Credit Reporting Act Notice

Effective January 1, 2013, there was a new form that employers must provide prospective or current employees when conducting background checks subject to the Fair Credit Reporting Act (FCRA). The main change in the form directs employees to contact the Consumer Financial Protection Bureau (CFPB) or visit its website at www.consumerfinance.gov/learnmore for further information about their consumer protection rights, versus contacting the Federal Trade Commission (FTC), the agency that has traditionally had responsibility for interpreting the FCRA. The CFPB has not, at this time, imposed additional substantive requirements on employers.

Despite Continuing Grace Period, Employers Should Switch to New Fair Credit Reporting Act Notices Now

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress transferred rule-making authority for the relevant portions of the Fair Credit Reporting Act (FCRA) from the Federal Trade Commission (FTC) to the Consumer Financial Protection Bureau (CFPB). Employers that use third parties to provide background check reports for hiring and other employment purposes must comply with FCRA, as well as any applicable state laws. Among other requirements, the FCRA mandates that employers using third party background checks provide applicants and employees with a notice of their rights under the FCRA in various situations, including: (i) prior to taking an adverse action against an individual based on his or her background check report; and (ii) in connection with the procurement of an investigative consumer report. Employers have historically used the FTC’s sample notice entitled “A Summary of Your Rights Under the Fair Credit Reporting Act” to help satisfy this requirement.

Employers Must Update Fair Credit Reporting Act Notices

As of January 1, 2013, employers must use a new Summary of Fair Credit Reporting Act Rights notice when advising applicants or employees of adverse actions taken because of information obtained from a background check or credit check.

Modified Fair Credit Reporting Act Notices Will Be Required Effective January 1, 2013

The following is an important message for all employers that use credit reporting agencies to perform pre-employment background checks or other related investigations:

New Requirements for Employers’ Background Checks and Social Security Number Usage

Under the Fair Credit Reporting Act (the “FCRA”), an employer that plans to make an employment decision adverse to a prospective or current employee based at least in part on information contained in a “consumer report” (which includes background checks performed by third parties) must provide that employee or applicant with a notice that includes a summary of consumer rights before taking the contemplated adverse action. Any summary of consumer rights that employers provide to employees or applicants pursuant to the FCRA on or after Jan. 1, 2013 must comply with new federal regulations adopted by the Consumer Financial Protection Bureau (the “CFPB”), which now shares jurisdiction over the FCRA with the Federal Trade Commission.

Updated Notice of Rights Form Required for Employers Who Conduct and Use Background Checks

By January 13, 2013, employers who obtain consumer reports (i.e., background reports) from consumer reporting agencies must replace the Summary of Rights form they provide to applicants/employees with a new version of the form.

Employment Law Update: Employers Face FCRA Update Deadline of January 1, 2013

Effective January 1, 2013, there is a new form that employers must provide prospective or current employees when conducting background checks subject to the Fair Credit Reporting Act (FCRA). The main change in the form directs employees to contact the Consumer Financial Protection Bureau (CFPB) or visit its website at www.consumerfinance.gov/learnmore for further information about their consumer protection rights, versus contacting the Federal Trade Commission (FTC), the agency that has traditionally had responsibility for interpreting the FCRA. The CFPB has not, at this time, imposed additional substantive requirements on employers.

Can You Still Consider An Applicant's Criminal Record?

Some of our dealership clients are confused about whether or not it is still permissible to check an applicant's criminal record. The confusion is due in part to the publicity concerning recently passed state and municipal laws which restrict the right of some employers to check an applicant's criminal record, and partially due to the EEOC's recently issued "Enforcement Guidance" on the topic.

Responding To The EEOC's Criminal Background Check Initiative

As most of our readers have probably heard by now, the EEOC seems to want all employers to discontinue, or at least significantly curtail, their use of criminal-background checks. The EEOC's Guidance outlines the agency's position on criminal-background-check policies, but leaves many important questions unanswered, particularly with respect to schools, which are often required to conduct criminal-background checks. So, what, if anything, should schools be concerned about in light of this bold policy move by the EEOC? To the surprise of some, the answer may actually be no different than what you are already doing.

EEOC ISSUES NEW GUIDANCE REGARDING CRIMINAL RECORDS

Employers commonly conduct criminal background checks, and may use such information to disqualify candidates for employment. For example, a pharmaceutical company may think twice before hiring someone it discovers has been recently convicted of a drug-related offense, while a bank obviously could decide that a convicted robber might not make a good teller. Failing to perform such “due diligence” could result in claims for negligent hiring too, where, for example, an employer fails to take steps to discover an applicant’s history of violent crimes, and that individual later harms another employee or member of the public.

EEOC Issues New Guidance Regarding Applicants and Employees with Criminal Records

New guidance from the U.S. Equal Employment Opportunity Commission ("EEOC") provides that employment decisions based on criminal history may constitute employment discrimination and suggests that employers eliminate policies or practices that generally exclude people from employment based on criminal records. New York law has long limited the use of arrests, criminal charges and convictions in employment decisions. This Alert summarizes the EEOC's guidance, revisits federal and New York state laws regarding background checks and permissible uses of criminal records in connection with employment decisions, and addresses how to comply simultaneously with the statutes and disclosure obligations imposed in federal securities regulations.

By The Way, Are You A Criminal?

The EEOC's Version Of "Don't Ask, Don't Tell" You've probably heard the news by now – the EEOC seems to want all employers to discontinue, or at least significantly curtail, their use of criminal-background checks. The EEOC's Guidance outlines the agency's position on criminal-background-check policies, but leaves many important questions unanswered. Understanding that the Guidance is not law, but only the EEOC's interpretation of the law, you should keep several issues in mind when hiring.

Using Conviction Records As A Screening Tool

The retail industry is beset by shrink both from internal and external sources. A store with shelves loaded with merchandise is a ripe target for shoplifting. Cash transactions at registers present multiple opportunities for a dishonest employee to steal from the company. Retailers invest millions in preventing these behaviors, but even the most sophisticated security systems cannot stop 100% of theft.

Are You Discriminating Against Ex-Cons?

Refusing to hire ex-convicts may violate federal prohibitions against race and national origin discrimination, according to new enforcement guidance from the Equal Employment Opportunity Commission.

Benefits Outweigh Risks In Criminal Background Checks

In April 2012, the National Consumer Law Center (NCLC) published a report titled "Broken Records: How Errors By Criminal Background Checking Companies Harm Workers and Businesses." The report urges the U.S. Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) to use their rulemaking authority under the Fair Credit Reporting Act (FCRA) to further regulate employers and criminal background check companies.

Guidance on the EEOC's New Guidance

Everything employers need to know about the new EEOC arrest and conviction record guidance.

EEOC Issues Enforcement Guidance on Employers' Consideration of Arrest and Conviction Records

On April 25, 2012, the Equal Employment Opportunity Commission (EEOC) issued, after a vote of 4-1, an updated Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII (the "Guidance"). The Guidance, which takes effect immediately, is a summary of the EEOC's long-held position that employers’ reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin, with significant changes in certain areas that are important to most employers. Republican-appointee Commissioner Constance S. Barker dissented, while Republican-appointee Commissioner Victoria A. Lipnic voted with the majority, after reportedly securing some employer-friendly concessions in the Guidance. There was a push to get the Guidance approved before Democrat-appointee Commissioner Stuart J. Ishimaru steps down later this month.

EEOC Issues Revised Enforcement Guidance on Criminal Histories in Employment Selection Decisions

On April 25, 2012, the United States Equal Employment Opportunity Commission ("EEOC") issued revised enforcement guidance on the extent to which employers may rely on an individual’s criminal history in making hiring or other employment selection decisions. EEOC has long taken the position that making employment decisions solely based on an applicant’s criminal record may violate Title VII of the Civil Rights Act of 1964, as amended, ("Title VII") when such reliance disproportionately and unjustifiably excludes people of a particular race or national origin and is not job related and consistent with business necessity, i.e., "disparate impact" discrimination.

EEOC Issues Enforcement Guidance on Employers' Consideration of Arrest and Conviction Records

On April 25, 2012, the Equal Employment Opportunity Commission (EEOC) issued, after a vote of 4-1, an updated Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII (the "Guidance"). The Guidance, which takes effect immediately, is a summary of the EEOC's long-held position that employers' reliance on arrest and conviction records may have a disparate impact on individuals because of their race or national origin, with significant changes in certain areas that are important to most employers. Republican-appointee Commissioner Constance S. Barker dissented, while Republican-appointee Commissioner Victoria A. Lipnic voted with the majority, after reportedly securing some employer-friendly concessions in the Guidance. There was a push to get the Guidance approved before Democrat-appointee Commissioner Stuart J. Ishimaru steps down later this month.

EEOC Releases Updated Guidance on Use of Conviction Records

Today, the Equal Employment Opportunity Commission (EEOC) released the first updates in nearly 25 years to its guidelines on when and how employers may inquire into an applicant’s arrest and conviction history. According to the EEOC, the new Guidance clarifies and updates the EEOC’s longstanding policy concerning the use of arrest and conviction records in employment, which will assist job seekers, employees, employers, and many other agency stakeholders. Our preliminary analysis confirms that the Guidelines do not appear to represent a fundamental shift in the EEOC’s positions, but rather summarize pre-existing guidelines and principles based on applicable case law and available demographic research.

Background Checks: There's An App For That

In January of this year, the Federal Trade Commission (FTC) issued a warning to three companies that sell mobile applications (apps) which provide background reports, including criminal record reports. The issues are whether those apps and reports are covered by the Fair Credit Reporting Act (FCRA), and whether the providers and their customers – that would be you – are complying with the FCRA's requirements.

Can You Refuse To Hire A Felon?

Imagine you are a hotelier hiring for a sensitive position – perhaps a night auditor or purchasing clerk. Your practice is to conduct criminal-background checks on all applicants, since almost all of your employees will have some access to your guests and their property. During an initial phone interview the applicant reveals a significant criminal conviction. He tells you that he was recently convicted of a felony involving distribution of narcotics, served a short sentence and is currently on probation.

Credit Checks by Employers - Are They Becoming a Thing of the Past?

Seven states (California, Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington) have laws prohibiting employers from checking credit reports unless there is a nexus to actual job responsibilities. In 2011, 29 states and the District of Columbia considered similar legislation. Are credit checks by employers becoming a thing of the past?

Skeletons in the Closet: The Legal Issues of Conducting Background Checks and Inquiries

As the economy rebounds, many employers affected by the recession are hiring again. The last time employers searched for talent when recruiting was being conducted at its current pace, the world of employee screening was very different. Philadelphia hadn't yet banned the "box;" there were not over 500 million Facebook users or multiple states enacting credit check laws. To avoid legal landmines, now is the time for employers to brush up on the basics of conducting background checks and inquires.

Retail Industry: Better Double Check Your Use Of Credit Checks

Colorado, Maryland and Pennsylvania are the latest to join a growing number of states that have taken steps to limit an employer's ability to perform credit checks on its employees. So far, only four states have actually enacted laws limiting use of credit checks for employment purposes. But approximately 10 others have introduced similar legislation aimed at prohibiting employers from using information contained in an employee's credit history to deny employment, or basing employment decisions (such as transfers, reassignments, promotions or terminations) on such information. Additionally, at least two states already prohibit the use of credit checks for non-financial jobs.

KAPLAN GETS TESTED

In my May 13, 2010 column,"What's in Your Wallet, Job Applicant," I addressed increased government scrutiny of employers who rely on credit checks to screen applicants. The Equal Employment Opportunity Commission has decided to turn up the heat.

High Court Rules NASA's Background Checks On Contractors Are Constitutional

This morning, with Justice Samuel Alito writing an opinion supported by eight justices, the U.S. Supreme Court held that the federal government's inquiries on two forms used to conduct background investigations on federal contractors do not violate a constitutional right to informational privacy. According to the Court, the inquiries were reasonable in light of the government's interest in identifying capable employees to faithfully conduct its business and the collected information was protected by the Privacy Act’s nondisclosure requirements.

Supreme Court: Public Employers May Ask Comprehensive Background Questions Of Employees

In a rare unanimous decision, the Supreme Court held on January 19, 2011 that NASA's background inquiries of its contract employees regarding drug treatment or counseling and other negative "general behavior or conduct" of its contract employees were tailored to the government's interests in managing its workforce and therefore did not violate the employees' right to informational privacy. The Court ducked the issue of whether such information is actually protected by any Constitutional right to privacy, leaving that question open for another day.

Employer's unwritten policy regarding criminal background checks sufficient to overcome summary judgment.

The 8th U.S. Circuit Court of Appeals has determined that a company’s unwritten policy against hiring applicants with theft-related convictions was sufficient basis to exclude a minority applicant from a position with the company.

WHAT'S IN YOUR WALLET, JOB APPLICANT?

Recent economic data suggest the job market is thawing. With high unemployment persisting, many employers will have several candidates applying for each new job opening.

BACKGROUND INVESTIGATIONS KEEP GETTING MORE COMPLICATED.

Employers increasingly are relying on credit and background checks in the hiring process. Employers want assurances that their employees are honest and trustworthy. Internal investigations of certain misconduct allegations are now required by anti-discrimination laws and others, such as Sarbanes-Oxley. At the same time, surveys show resume fraud is rampant. Job references often won’t provide information about former employees other than “name, rank and serial number.” With a bad economy, huge student loan liabilities, and the mortgage crisis, potential employees may appear to be untrustworthy with credit.

Does Your School Make the Grade in Conducting Background Checks?

You've just admitted an adorable 5 year-old child to Kindergarten. The next day, you receive an anonymous message that the child's mother is on the state's sex-offender website. You check and confirm that the information is correct. How should a school handle this situation? Must you act? Is it enough to eliminate the parent from campus? What about the inevitable sleepover? Must you notify the school community of the parent's background? As discussed below, there are no easy answers to these issues. The problem that schools face with more frequency today is how to determine which persons should be allowed to be on the school's campus, whether as an employee, contractor, or parent. In addition to complying with various state laws and accrediting guidelines that typically address employees and contractors, schools must increasingly ask: Should we require more information about our parents? If so, under what circumstances? And if we don't, what are the consequences?
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