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FCRA Disclosure Rules

Your background investigation firm should provide you with legal disclosure forms (updated pursuant to any Federal Trade Commission staff opinion letters) in both English and Spanish that require candidates signatures to demonstrate their consent to being investigated. (The Fair Credit Reporting Act makes it legal to procure a consumer report for employment purposes only if the consumer has been notified in a clear and conspicuous written disclosure before the consumer report request, and only provided that the consumer has given written authorization.) In addition, sample rejection letters to applicants should be provided to you should your decision not to hire be based wholly or in part on information contained in the report.

FCRA Adverse Action Rules

Note that subjects of background checks have the right to dispute the information discovered by the background checking agency. Your agency will be able to assist you in those cases. However, a practical response on your part, as the employer, would be to acknowledge the job applicant s disagreement with the findings and notify him of the agency that provided the information along with the specific information itself. At that point, simply explain that the candidate may pursue clarifying his record on his own time. And once he does, if (a) the position is still open and (b) he is still clearly the most qualified candidate for the position, you would be very happy to consider his candidacy further. Don' t be too surprised to find, however, that you may never hear from that individual again.

Finally, be sure to include information regarding your company s practice of conducting background checks in your preemployment literature. There' s definitely a preventative value to stating your intentions up front. After all, if candidates learn from your recruitment brochure, employment application, or from posters in your office that you conduct criminal background checks (or drug screenings, for that matter), they will typically walk out before taking the time to fill out an application if they know they can' t meet your requirements.

Dollar for dollar, background checks are an excellent preemployment tool. Expect 3 to 5 percent of all candidates to be knocked out of the running. That could save you significant time and money depending on the number of hires that you make every year. The added time to the hiring process is minimal because you can begin background checks at the same time you conduct reference checks. Most important, your employees will appreciate your due diligence in assuring them a safer workplace.

Civil Records Checks

Whereas criminal records checks have become commonly accepted in corporate America, civil records checks remain controversial. The Internet has provided greater access to employers in terms of researching candidates' backgrounds, and the demand for private information that extends beyond the criminal realm is fair game in many companies' eyes.

Civil records checks might cover such areas as divorce, discrimination and other civil lawsuits, trade secret and intellectual property violations, and breaches of fiduciary duty. Whether you believe that such issues might impact your decision to hire a candidate is up to you. However, because the trend to conduct civil background checks appears to be on the rise, it may be worth discussing with your background-checking provider as well as your employment counsel.

Before broaching the topic, however, keep the following two caveats in mind:

1. Civil lawsuits, unlike criminal cases, do not generally provide an applicant's address, date of birth, or other identifying criteria. Therefore, you may be conducting this search based solely on a candidate's name, which clearly makes this a challenging task with somewhat limited usefulness.

2. Because few states possess statewide civil records databases, the consistency of the investigator's research and data-mining efforts may be compromised.

More significantly, the relevance of the information that you develop may be challenged by candidates who are denied employment. How will they find out that you used the civil information in your employment decision? Because under the Fair Credit Reporting Act, you're obligated to inform them of any adverse employment action that was based on the data you collected. It's not much of a stretch of the imagination to assume that applicants may claim that you improperly relied on information that was neither job-related nor a valid predictor of potential job performance.

Finally, remember that courts have debated the use of criminal background checks and their application in the workplace. That means that workplace standards and legal interpretations are fairly well documented and predictable. However, there has been little discussion in the courts up to now regarding the appropriate use of civil records in the preemployment process. Therefore, what constitutes appropriate company behavior in matters such as the misuse of civil records in hiring decisions is fairly undefined.

Generally speaking, you don't want to become a footnote in the case law books just to prove a point. If you move forward with civil background checks, define the parameters of your program, discuss in advance the relevance of the information you're seeking to uncover and, as always, seek appropriate legal counsel.

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