Employment Background Checks Cases
The National Consumer Law Center reports that 93 percent of employers run criminal background checks on some job candidates, and 73 percent of employers conduct such checks on all potential new hires. The Fair Credit Reporting Act applies to these employment background checks, not just to credit reports. These employment reports can include criminal history checks, public records checks, and proprietary credit reports.
There has been a lot of confusion about these background checks, because a recent Oregon law seemed to ban the use of credit reports in hiring decisions. However, there were notable exceptions to the ban. The exceptions to the law include the following circumstances:
Employers that are federally insured banks or credit unions;
Employers that are required by state or federal law to use Individual credit history for employment purposes;
The employment of a public safety officer, or
Employers that can demonstrate that the information in a credit report is substantially job-related and the employer’s reasons for the use of such information are disclosed to the employee or prospective employee in writing.
As noted above, the Fair Credit Reporting Act requires the employer to take several actions to comply with the law. First, when an employer uses a “consumer report” (including public records checks, background screening, or credit reports) the employer must make a clear and conspicuous written disclosure that a consumer report may be obtained for employment purposes. It must be disclosed in a stand-alone document consisting solely of the disclosure. Second, before taking any adverse action based on the report (whether in whole or in part), the employer must provide to the consumer a copy of the applicant’s report and summary of the applicant’s rights under the FCRA.
Also, the companies that prepare these background reports are subject to the Fair Credit Reporting Act. A consumer has a right to obtain a complete copy of their employment reports, and to dispute information that is incomplete, inaccurate, or obsolete. When a job applicant disputes information in their consumer report, the reporting agency must conduct an investigation and report back to the applicant the results of its investigation. The reporting agency must determine whether the information is complete and accurate, and if it cannot do so, it must delete the information.