Employers Can’t Just Run a Background Check on You!

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Many employers have a practice of paying a service to do background checks (and sometimes credit checks) on their employees and prospective employees.  What many employees don’t know is that the Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC) have strict rules governing these third-party background checks.

When an employer sends information about an employee or applicant to a background check company, it must first get his or her permission in writing to perform this background check.  The form that it gives the employee must comply with FTC rules- it cannot have other, unrelated information on the form, and it must not contain a release of liability.  The reason for this is that often, unrelated or extraneous material on this form confuses people or distracts people from the purpose of the form, which is to tell them that they are going to have their criminal history and/or credit checked by a third party, and that the employer is going to get the report.  The employer must also provide the employee with a free copy of the report if he or she requests it.

Once the employer gets this report, it has to tell the employee what’s on it before making any adverse decisions.  So, for example, if any employer got such a report back that indicated that an applicant has grand theft auto on her record, it must inform the applicant of this and allow the applicant to contest this.  This is because mix-ups happen- maybe the applicant has the same name as a car thief or a similar social security number.  The point is to protect employees and applicants from being penalized unfairly for something they didn’t do.

Where does the EEOC come in? As you can imagine, running background and credit checks could lead to discrimination, or at least what’s called “disparate impact.”  Employers may not choose one group of people (race, gender, ethnicity, etc) to subject to background checks and not others.  Further, employers must be careful that their selections do not unintentionally affect one group of people more than another.

Attorneys around the country have started to bring class action lawsuits against employers for noncompliance with this law.  It’s an important way to ensure that people aren’t unfairly denied work or fired without the opportunity to consent to a background check or contest incorrect information.  The Hayber, McKenna & Dinsmore is looking into these violations, and would be interested in speaking with people who believe that their rights under this law may have been violated.

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