FTC to Employers: The FCRA Covers Employment Screening

April 18th, 2014

FCRA-employersTwo recent settlements announced by the Federal Trade Commission (FTC) drive home the point and serve as an important reminder that employment background screening is subject to the federal Fair Credit Reporting Act (FCRA).

You, as an employer, should understand how the FCRA relates to your employment screening program and ensure that your consumer reporting agency (CRA, background screening provider) is doing their part to keep you in compliance.

The settlements highlighted by the Commission involve companies that provided background information about individuals to employers, but allegedly failed to uphold their FCRA obligations.

In broad outline form, the FCRA requires CRAs to:

  • Furnish information that is accurate and complete, and
  • Investigate consumer disputes about the accuracy of information they provide.

What Employers Need to Know about the FCRA

When you run background checks through a company in the business of compiling background information, you must comply with the Fair Credit Reporting Act (FCRA). The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) enforce the FCRA.  Read the rest of this entry »


Kaplan 2, EEOC 0

April 16th, 2014

EEOC v KaplanThe intriguing results of a highly-publicized EEOC lawsuit highlight that if the EEOC is to win a judgment against an employer for disparate impact discrimination, it must use valid statistical methodology to prove “disparate impact”.

This case demonstrates why that will not be easy to do.

EEOC v Kaplan

The EEOC recently sued Kaplan Higher Education Corporation for “disparate impact” discrimination, alleging Kaplan’s use of employment credit checks causes it to disproportionately screen out more African-American applicants than white applicants, creating a disparate impact in violation of Title VII of the federal Civil Rights Act. The Commission attempted to establish this fact by using an expert witness analysis of a pool of background checks from one of Kaplan’s vendors.

Among the problems facing EEOC expert Kevin Murphy, was that Kaplan did not have racial identification in the applicant files, and without that, according to the courts, there was no way to demonstrate discrimination by disparate impact. Although he could try to reconstruct the racial identity of some of the applicants from other files, he had to develop a methodology to assign race to many of the applicants. This method, which was apparently invented by Murphy solely for this trial, was the pivot and end point of the case.

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Social Media Background Checks: a Pandora’s Box

April 2nd, 2014

Social Media Background ChecksSocial media succeeds because it connects people with personal information. That personal information is exactly why some employers want to delve into applicants’ and employee’s social media accounts. These informal social media background checks promise the kind of unfiltered view of a person’s character you just can’t get easily.

Or, does it? The fact that an applicant or employee has exposed information to public view—knowingly or unknowingly—does not automatically give you a right to use it. Undefined privacy rights aside, you should assume that the laws that are intended to ensure fairness in employment do apply. Personal traits that belong to a protected class under Title VII or have other legal protections should not be used in making employment decisions, no matter how you acquire them.

But the crucial difficulty is that you create a different and additional type of risk using social media. Once you have looked into the Pandora’s Box of someone’s Facebook account, you cannot easily prove that you did not see what is there. If you get into an adversarial position with that person, the fact that you know something you would not otherwise have asked about can be used against you.

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