Total Articles: 106
Littler Mendelson, P.C. • January 30, 2019
Almost two years ago to the day, the U.S. Court of Appeals for the Ninth Circuit became the first appellate court to rule on the lawfulness of a liability waiver in a Fair Credit Reporting Act (FCRA) disclosure. In Syed v. M-I, the Ninth Circuit ruled that an employer acted “willfully” in violation of the FCRA when it included a liability waiver in its FCRA disclosure.1 On January 29, 2019, the Ninth Circuit doubled-down on its ruling, holding in Gilberg v. Cal. Check Cashing Stores, 9th Cir., No. 17-16263, that the statute’s prohibition on including so-called “extraneous” information with the requisite disclosure extends even to information about the legal rights that job applicants have under state fair credit reporting laws.
XpertHR • January 13, 2019
The Fair Credit Reporting Act (FCRA) requires employers that use outside companies to conduct a background check and/or obtain a credit report to, among other things, convey to job applicants their intent to do so with a clear and conspicuous written disclosure.
Fisher Phillips • January 10, 2019
In what is becoming an annual warning, lawsuits under the Fair Credit Reporting Act are again on the rise. Whether brought against consumer reporting agencies for reporting inaccurate or outdated information or employers for failing to satisfy disclosure and notice requirements, FCRA litigation increased by 4 percent from 2017.
Littler Mendelson, P.C. • October 01, 2018
Employers that use criminal record-screening policies must continue to be vigilant about compliance with all applicable laws and should know that the EEOC’s scrutiny of such policies, while perhaps scaled back, has not ended.1 To the contrary, the EEOC has demonstrated a continued interest in discouraging employers from directly or indirectly screening out job applicants who belong to protected classes under Title VII and tend to be arrested and convicted at disproportionately higher rates.
FordHarrison LLP • September 23, 2018
On September 12, 2018, the Consumer Financial Protection Bureau (CFPB), the federal agency which oversees the federal Fair Credit Reporting Act (FCRA) issued an interim final rule updating the agency’s model FCRA notice. The new form replaces the old form effective September 21, 2018.
Fisher Phillips • September 23, 2018
There is a little-known provision from a new federal law that will most likely impact your hiring practices and your standard hiring documents—and it kicks in today. As of September 21, all employers must update their background check forms to advise applicants and employees of the ability of a “national security freeze,” allowing them additional protections from identity theft. This change could require you to make an immediate change to your standard hiring methods: what do you need to do in order to comply?
Ogletree Deakins • September 23, 2018
On September 12, 2018, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule updating its A Summary of Your Rights Under the Fair Credit Reporting Act form, (“Summary of Rights”) which is required to be given by employers to applicants and employees at various points in the background check process. The effective date for the updated Summary of Rights is Friday, September 21, 2018.
XpertHR • September 23, 2018
Effective today, employers and background check companies should begin using two updated Fair Credit Reporting Act (FCRA) model forms, the Summary of Consumer Rights Under FCRA and the Summary of Consumer Rights Identity Theft forms. The Consumer Finance Protection Bureau (CFPB) had issued an interim final rule last week updating these notice requirements.
Phelps Dunbar LLP • September 18, 2018
Earlier this year, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which, in part, provides consumers the right to obtain from consumer reporting agencies security freezes free of charge. A security freeze is designed to protect victims of identity theft. Such a freeze generally stops all access to a consumer’s credit report.
Littler Mendelson, P.C. • September 17, 2018
Employers that use criminal record screening policies must continue to be vigilant about compliance with all applicable laws. Following a multi-million dollar settlement by a leading retailer earlier this year,1 a recent multi-million dollar settlement in New York involving a large New York City sports and entertainment venue reinforces this point.2 In the recent case, the employer settled a class action lawsuit for a significant cash payout, including $165,000 in attorney’s fees, and other noteworthy programmatic relief. This recent settlement provides valuable lessons for employers.
Jackson Lewis P.C. • September 16, 2018
A new model “A Summary of Your Rights Under the Fair Credit Reporting Act” disclosure form document was released on September 12, 2018, by the Consumer Financial Protection Bureau (CFPB). Employers and background check companies may begin using the new form on September 21, 2018.
Littler Mendelson, P.C. • September 11, 2018
On September 10, 2018, in Long v. Southeastern Pennsylvania Transportation Authority (SEPTA), the U.S. Court of Appeals for the Third Circuit joined the chorus of recent circuit court opinions tackling the question of constitutional standing to sue in federal court under the Fair Credit Reporting Act (FCRA).
Littler Mendelson, P.C. • September 10, 2018
On September 6, 2018, in Auer v. Trans Union, LLC, the U.S. Court of Appeals for the Eighth Circuit joined the Seventh Circuit in holding that an individual plaintiff did not have constitutional standing to sue in federal court under the Fair Credit Reporting Act (FCRA) for an alleged violation of the FCRA’s authorization and disclosure requirement. This is one in slew of recent federal circuit court opinions that address the threshold issue of standing. Standing is constitutionally required for the plaintiff to pursue his or her claim in federal court. In order to have standing, a plaintiff must show that he or she suffered a concrete “injury-in-fact” because of the defendant’s alleged wrongdoing. In Auer, the court held that the plaintiff failed to establish her standing and directed the trial court to dismiss the lawsuit.
Ogletree Deakins • September 03, 2018
Courts have ruled that sweeping and overbroad employer-initiated disqualification policies must be struck absent business justification. But where is the line on what constitutes an overbroad and impermissible policy when applicant and employee disqualification is mandated by federal law? The Eighth Circuit Court of Appeals considered this very issue when affirming summary judgment for an employer on a former employee’s Age Discrimination in Employment Act (ADEA) disparate impact claims. Eggers v. Wells Fargo Bank NA, No. 16-4376 (August 13, 2018).
Littler Mendelson, P.C. • August 30, 2018
Fair Credit Reporting Act (FCRA) class action lawsuits against employers are reaching epidemic proportions as class-wide settlements encourage more lawyers to move into this niche practice area.1 Because most of the opinions tend to come from trial courts, definitive guidance for employers is lacking. What’s more, the plaintiff’s bar may attempt to use a new amendment to the FCRA to argue that employers have additional duties under the FCRA’s “pre-adverse action” notice provisions (15 U.S.C. § 1681b(b)(3)). However, on closer scrutiny, as described below, this argument appears to be “creative” at best.
Littler Mendelson, P.C. • August 30, 2018
On August 29, 2018, the U.S. Court of Appeals for the Seventh Circuit issued its opinion in Robertson v. Allied Solutions, LLC, holding the plaintiff had standing to sue in federal court under the Fair Credit Reporting Act (FCRA). Standing is a constitutional requirement to bring a lawsuit in federal court. Standing requires, among other things, that the defendant's alleged wrongdoing caused the plaintiff to suffer a concrete “injury-in-fact.” In Robertson, the court held that the plaintiff established standing for her class action claims based on the defendant’s alleged violation of the FCRA’s “pre-adverse action” notice requirement.1 Earlier this year, the Ninth Circuit reached just the opposite conclusion in a similar class action.2 Together, the two opinions underscore the grave uncertainty in this evolving area of class action litigation, one that employers should continue to be mindful of and closely monitor.3
Jackson Lewis P.C. • August 21, 2018
The Ninth Circuit’s recent ruling in Dutta v. State Farm Mutual Automobile Insurance Company highlights the importance of evaluating and potentially challenging a plaintiff’s standing in a Fair Credit Reporting Act (“FCRA”) action.
Littler Mendelson, P.C. • April 09, 2018
Employers that use criminal record screening policies must continue to be vigilant about compliance with all applicable laws. A recent settlement by one of the nation’s leading retailers, Target, reinforces this point. The company has settled a threatened nationwide class action lawsuit arising under Title VII of the Civil Rights Act of 1964 for $3.74 million dollars and other programmatic relief.
Littler Mendelson, P.C. • February 28, 2018
The FCRA is not a classic employment law, but regulates the procurement and use of background checks by employers. Before procuring a background check from a consumer reporting agency (CRA), the employer must disclose its intention to do so and obtain the individual’s authorization (known as the “stand-alone disclosure requirement”).
XpertHR • February 19, 2018
A federal judge has blocked the Equal Employment Opportunity Commission (EEOC) from enforcing an Obama-era rule in Texas that advised employers to use criminal background checks only when they are job-related or tied to legitimate business needs.
Littler Mendelson, P.C. • February 11, 2018
On February 1, 2018, a federal judge enjoined the EEOC and U.S. Attorney General from enforcing against the State of Texas the EEOC’s 2012 Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (the “Guidance”).1 The judge granted summary judgment for the State of Texas on the narrow basis of the EEOC’s issuance of the Guidance without providing notice to the public and an opportunity to comment, as required under the Administrative Procedures Act (APA). Although the injunction itself is specific to the State of Texas, the order opens the door to other similar lawsuits against the EEOC and is likely to push the EEOC to reconsider the Guidance.
Littler Mendelson, P.C. • January 09, 2018
Over the past few years, employers have come to expect new ban-the-box laws, and 2018 is no exception: one state law was amended and one new local law was enacted. In late December 2017, New Jersey expanded its previously-enacted ban-the-box law, and the City of Spokane, Washington enacted a new ban-the-box ordinance. While the New Jersey amendment became effective immediately, the portions of the Spokane ordinance dealing with private employers go into effect on June 14, 2018, but will not be enforced with penalties until January 1, 2019.
Littler Mendelson, P.C. • December 26, 2017
In April 2012, the Equal Employment Opportunity Commission (“EEOC”) issued updated “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”1 The guidance concerns how, in the EEOC’s view, Title VII restricts an employer’s discretion to consider criminal records for hiring decisions. What followed was a flurry of new EEOC charges and broad-based investigations relating to employment criminal records checks. Despite some setbacks in the courts,2 the EEOC is continuing enforcement activities. The EEOC’s Strategic Enforcement Plan for Fiscal Years 2017-2021 refers to “Eliminating Systemic Barriers in Recruitment and Hiring” (e.g., use of “screening tools” and “background screens”) and notes this as one of the agency’s “National Priorities” for the next several years.
Jackson Lewis P.C. • December 07, 2017
On November 13, 2017, the U.S. Supreme Court declined to hear the appeal of one of 2017’s more significant Fair Credit Reporting Act (FCRA) opinions, Syed v. M-I, LLC. (9th Cir. Jan. 20, 2017). In Syed, the Ninth Circuit Court of Appeals held that a background check disclosure which included a liability waiver violated the FCRA. This case was significant because the Ninth Circuit is the first federal appeals court to definitively state that the FCRA “unambiguously bars the inclusion of a liability waiver.” The court also notably held that the employer willfully violated the FCRA by including the liability waiver in the disclosure, finding that no reasonable interpretation of the statute would allow any language besides a disclosure and authorization.
XpertHR • November 30, 2017
A Colorado agency has ordered Uber to pay an $8.9 million fine for allowing nearly 60 drivers to work for it despite possessing background check information that should have disqualified them under the law.
Ogletree Deakins • August 20, 2017
On August 15, 2017, the Ninth Circuit Court of Appeals decided Robins v. Spokeo, Inc. (No 11-56843), a case addressing the standing necessary to maintain an action in federal court that had been remanded to the court by the Supreme Court of the United States. In Spokeo, an individual claimed that a search engine company (which the court presumed to be a consumer reporting agency (CRA)) willfully failed to comply with the Fair Credit Reporting Act (FCRA) by providing inaccurate information about him. According to the Ninth Circuit’s decision, because Robins suffered an intangible injury under the FCRA, he established a concrete harm sufficient to give him standing. Although the case deals with alleged injuries resulting from a CRA’s alleged failure to comply with the FCRA, its holding may impact injury allegations against employers brought under the act.
Littler Mendelson, P.C. • August 16, 2017
On August 15, 2017, the U.S. Court of Appeals for the Ninth Circuit issued another opinion in the saga of Robins v. Spokeo, Inc.—a case dealing with the question of what violations of a federal statute are sufficient to confer Article III standing. The plaintiff alleges Spokeo violated the federal Fair Credit Reporting Act (“FCRA”) by reporting inaccurate information about him. While the district court dismissed for lack of standing, the Ninth Circuit reversed and found that the plaintiff established an injury-in-fact. In May 2016, the U.S. Supreme Court vacated the Ninth Circuit’s opinion and declared that a plaintiff does not “automatically” have the requisite injury-in-fact “whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”
Ogletree Deakins • August 15, 2017
The Seventh Circuit Court of Appeals has become the second federal court of appeals to weigh in on an important legal issue for employers in defending against expensive, increasingly common Fair Credit Reporting Act (FCRA) class action lawsuits. On August 1, 2017, the Seventh Circuit held that a plaintiff who alleged extraneous information in a background check disclosure form, without more, lacks the necessary Article III standing to maintain a lawsuit. Groshek v Time Warner Cable, Inc., No. 16-2711.
Jackson Lewis P.C. • August 08, 2017
A job applicant alleging a violation of one of the procedural requirements of the Fair Credit Reporting Act (FCRA) lacked standing to sue under Article III of the United States Constitution because he failed to allege facts showing he suffered a concrete injury in fact, apart from the alleged statutory violation itself, the U.S. Court of Appeals for the Seventh Circuit has ruled unanimously, applying the U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). Groshek v. Time Warner Cable, Inc., No. 16-3355; Groshek v. Great Lakes Higher Education Corp., No. 16-3711 (7th Cir. Aug. 1, 2017).
Littler Mendelson, P.C. • July 18, 2017
The filing of a new discrimination lawsuit by the Equal Employment Opportunity Commission (EEOC) answers the question whether, after five years of intensive scrutiny, employers can breathe a sigh of relief in terms of screening job applicants based on criminal records.1 The new filing reveals that the EEOC remains interested in trying to use litigation to discourage employers from directly or indirectly screening out the protected class members who tend to be arrested and convicted at disproportionately higher rates. Although the facts alleged by the EEOC are egregious, employers should take note of the lawsuit as indicating the need for caution when relying on criminal background checks in the hiring process.
Littler Mendelson, P.C. • July 02, 2017
The U.S. District Court for the Eastern District of Wisconsin recently held that an employer potentially violated the Fair Credit Reporting Act (FCRA) when it provided the employee with three days to dispute information contained in a background report and not the five it promised in the pre-adverse action notice.1 The court’s opinion is a cautionary tale to employers to pay careful attention to their adverse action notice procedures, and in that regard, has takeaways for consumer reporting agencies (CRAs) that provide notices on behalf of employers.
Goldberg Segalla LLP • May 23, 2017
You can learn a lot about reputational harm and hiring decisions from the NFL. A college football player potentially lost millions recently as his draft stock tumbled in the wake of a rape investigation weeks before the NFL Draft. Granted, the player was selected in the first round, but at a lower pick than originally projected. Reportedly, numerous teams called the player within 48-hours of the disclosure of the investigation to hear his version of events. Some teams reportedly administered a polygraph test to the player. But what’s enough? What steps must an employer take to investigate potential employees? A related question: what’s the potential reputational cost to the employer? These are critical employment decisions.
Fisher Phillips • May 08, 2017
Virtually every thoughtful employer wants to hire the very best employees they can find. And why not? Good workers produce better products, provide better service, give maximum effort, learn and adopt the company’s best practices and culture. Bad employees are indifferent, if not outright negative about the company, its customers, its products, its values.
Littler Mendelson, P.C. • May 03, 2017
On April 28, 2017, the Federal Trade Commission (FTC) issued a blog article entitled “Background checks on prospective employees: Keep required disclosures simple.”1 The FTC is one of the two federal agencies with oversight of the Fair Credit Reporting Act (FCRA); the other one is the Consumer Financial Protection Bureau (CFPB). The FCRA imposes specific obligations on employers that order background checks from vendors (known as consumer reporting agencies), including the obligation to obtain informed authorization from job applicants for background checks.
Fisher Phillips • March 01, 2017
Background checks have been a tool for employers to use to screen applicants for quite some time. However, recently there have been many changes and an increase in litigation in the background check arena.
Littler Mendelson, P.C. • February 27, 2017
In 1998, Hawaii became the first state to “ban the box,” prohibiting private employers from inquiring about a candidate’s criminal history until the employer has made a conditional offer. It was not for another 12 years before another state, Massachusetts, followed suit and enacted similar legislation, although the Massachusetts statute permits employers to ask the question about criminal history during the interview process.
XpertHR • February 23, 2017
No employer wants to be on the evening news for a workplace violence incident or other criminal conduct that it may have avoided by more thoroughly vetting job candidates.
FordHarrison LLP • February 03, 2017
Executive Summary: In a case of first impression, the Ninth Circuit Court of Appeals recently held that a background check disclosure that included a liability waiver violated the Fair Credit Reporting Act (FCRA). The Ninth Circuit is the first federal appeals court to decide this issue and definitively stated that the statute “unambiguously bars the inclusion of a liability waiver.”
Ogletree Deakins • January 27, 2017
On January 20, 2017, the Ninth Circuit became the first court of appeals to weigh in on several important legal issues for expensive, increasingly common background check class actions—specifically (a) the extraneous content and language in an employer’s background check disclosure forms and online screens that violate the federal Fair Credit Reporting Act (FCRA), and (b) the standing requirements to file background check claims. In Syed v. M-I, LLC, the Ninth Circuit held that (1) inclusion of a liability release in an employment background check disclosure is a willful violation of the FCRA, subjecting an employer to expensive statutory and punitive damages, and (2) this kind of violation results in a concrete harm that satisfies Article III standing, as recently clarified by the Supreme Court of the United States in Spokeo, Inc. v. Robins.
Littler Mendelson, P.C. • January 26, 2017
On January 20, 2017, the U.S. Court of Appeals for the Ninth Circuit became the first appellate court to rule on the lawfulness of a liability waiver in a Fair Credit Reporting Act (FCRA) disclosure. In Syed v. M-I, the Ninth Circuit ruled that an employer acted willfully in violation of the FCRA when it included a liability waiver in its FCRA disclosure.
Franczek Radelet P.C • December 15, 2016
Human Resources professionals with U.S. companies that are reliant upon skilled foreign workers often spend the last few months of the calendar year and the beginning of the new calendar year identifying individuals who will require H-1B sponsorship.
Fisher Phillips • October 12, 2016
Apparently, even a “no decision” decision by the U.S. Supreme Court can still establish precedent.
Ogletree Deakins • October 03, 2016
The legal showdown between the State of Texas and the Equal Employment Opportunity Commission (EEOC) over the agency’s background check guidance took another turn on September 23, 2016, when the Fifth Circuit Court of Appeals issued an order withdrawing its previous June opinion and remanding the case to U.S. District Court for the Northern District of Texas.
FordHarrison LLP • September 23, 2016
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.
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.
Jackson Lewis P.C. • May 22, 2016
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).
FordHarrison LLP • May 17, 2016
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.
Jackson Lewis P.C. • May 17, 2016
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.
Littler Mendelson, P.C. • May 12, 2016
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.
Littler Mendelson, P.C. • January 04, 2016
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.
XpertHR • December 17, 2015
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.
Littler Mendelson, P.C. • December 08, 2015
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."
XpertHR • November 06, 2015
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.
Ogletree Deakins • November 04, 2015
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.
Goldberg Segalla LLP • November 04, 2015
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.
Littler Mendelson, P.C. • September 28, 2015
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.
Littler Mendelson, P.C. • September 23, 2015
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.
XpertHR • September 09, 2015
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.
Littler Mendelson, P.C. • July 14, 2015
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.
Ogletree Deakins • May 06, 2015
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).
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.
Ogletree Deakins • April 27, 2015
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.
Vedder Price • April 10, 2015
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.
Goldberg Segalla LLP • March 03, 2015
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
Ogletree Deakins • November 24, 2014
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.
Jones Walker • October 29, 2014
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.
Ogletree Deakins • October 14, 2014
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.
Franczek Radelet P.C • April 07, 2014
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.
Ogletree Deakins • March 24, 2014
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.
ManpowerGroup • February 25, 2014
Here’s a quick overview of the latest developments, followed by a more detailed discussion:
Fisher Phillips • November 04, 2013
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.
Fisher Phillips • October 01, 2013
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.
Phelps Dunbar LLP • September 13, 2013
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.
Fisher Phillips • September 05, 2013
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.
Phelps Dunbar LLP • June 18, 2013
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.
Nexsen Pruet • June 18, 2013
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.
Fisher Phillips • March 05, 2013
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.
Phelps Dunbar LLP • February 18, 2013
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.
Nexsen Pruet • February 18, 2013
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.
Franczek Radelet P.C • February 11, 2013
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.
Brody and Associates, LLC • January 09, 2013
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.
Franczek Radelet P.C • December 21, 2012
The following is an important message for all employers that use credit reporting agencies to perform pre-employment background checks or other related investigations:
Schulte Roth & Zabel LLP • December 07, 2012
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.
Vedder Price • December 06, 2012
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.
Nexsen Pruet • November 30, 2012
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.
Fisher Phillips • November 06, 2012
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.
Fisher Phillips • July 06, 2012
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.
Schulte Roth & Zabel LLP • June 14, 2012
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.
Fisher Phillips • June 07, 2012
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.
Fisher Phillips • June 04, 2012
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.
Brody and Associates, LLC • May 16, 2012
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.
Fisher Phillips • May 11, 2012
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.
ManpowerGroup • May 02, 2012
Everything employers need to know about the new EEOC arrest and conviction record guidance.
Ogletree Deakins • April 30, 2012
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.
Phelps Dunbar LLP • April 27, 2012
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.
Ogletree Deakins • April 27, 2012
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.
Franczek Radelet P.C • April 26, 2012
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.
Fisher Phillips • March 05, 2012
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 â€“ that would be you â€“ are complying with the FCRA's requirements.
Fisher Phillips • March 05, 2012
Imagine you are a hotelier hiring for a sensitive position â€“ 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.
Brody and Associates, LLC • February 23, 2012
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?
Fisher Phillips • June 20, 2011
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.
Fisher Phillips • March 03, 2011
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.
Ogletree Deakins • January 21, 2011
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.
Fisher Phillips • January 20, 2011
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.
Ogletree Deakins • October 11, 2010
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.
Fisher Phillips • March 06, 2008
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?